Course Content
What Is Anti-Money Laundering (AML)?
AML regulations attempt to stop the illegal laundering of illicit funds. Individual governments and multinational organizations like the FATF legislate against money laundering activities. Money laundering takes “dirty” money and turns it into clean money. This can be done by disguising the origins of the funds, mixing them with legitimate transactions, or investing them into legal assets. Crypto is an attractive way to launder money due to its privacy, difficulty in retrieving funds, and underdeveloped legislation. Large-scale seizures of crypto show criminals regularly use it to launder huge sums. Binance and many other crypto exchanges track suspicious behavior as part of their AML compliance and report it to law enforcement.
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What Is Anti-Money Laundering (AML)?
About Lesson

You can break down the basic activities of a regulator or cryptocurrency exchange into three steps:

1. Suspicious activities, such as large inflows or outflows of funds, are automatically flagged or reported. Inconsistent behavior, such as an increase in the number of withdrawals from a typically low-activity account, is another example.

2. During or after an investigation, the user’s ability to deposit or withdraw funds is stopped. This action cuts off any more possible laundering activities. The investigator then makes a Suspicious Activity Report (SAR).

3. If there is evidence of illegal activity, the relevant authorities are informed, and the evidence is supplied. If stolen funds were found, they would be returned to their original owners when possible.

Cryptocurrency exchanges typically take a proactive approach to AML. With the vast amount of compliance pressure placed on the crypto industry, it’s standard for exchanges like Binance to be more vigilant and cautious than required. Transaction monitoring and enhanced due diligence are the two key tools in fighting money laundering schemes.

Exercise Files
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