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.
What Is Anti-Money Laundering (AML)?
About Lesson

Due to cryptocurrency’s pseudonymous nature, criminals use it to launder illicit funds and commit tax evasion. The regulation of cryptocurrency improves its overall reputation and makes sure that appropriate taxes are collected. Improvements in AML benefit legitimate crypto users, although it does require extra effort and time investment by all parties.

According to Reuters, criminals laundered an estimated $1.3 billion (US dollars) of “dirty” money through crypto in 2020. Crypto is suited to money laundering for several reasons:

1. Transactions are irreversible. Once you’ve sent funds via the blockchain, they cannot be returned unless the new owner sends them back. The police and regulatory agencies cannot retrieve funds for you.

2. Cryptocurrency offers anonymity. Some coins like Monero prioritize the privacy of transactions. There are also “tumbler” services that layer crypto through different wallets to make its trail difficult to track.
3. Its regulation and taxation are still uncertain. Tax authorities globally still struggle to tax crypto efficiently, and criminals exploit this.