Anti-Money Laundering (AML) encompasses a set of laws, regulations, and procedures designed to prevent any financial crimes and fraud in the cryptocurrency sector. AML regulations address a wide range of illicit activities, including tax evasion, public corruption, and market manipulation, such as wash trading.
Various governmental entities and legislation establish AML standards. In India, agencies like the Enforcement Directorate (ED) and the Financial Intelligence Unit (FIU) enforce these regulations to protect public interest and ensure compliance with anti-money laundering provisions.
Key legislative contributions to AML requirements in India include the Prevention of Money Laundering Act of 2002 and the Prevention of Money Laundering (Maintenance of Records) Act of 2005.
AML is closely linked to Know Your Customer (KYC) standards, which involve verifying clients’ identities and income sources. KYC also works closely with the financial institutions to monitor their users’ activities continuously.
