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What are KYC and AML for


Oct 27, 2022

What are KYC and AML for

All work with cash and electronic money is associated with data verification. This is necessary so that people do not lose money, and the state monitor the turnover of funds within the country. Therefore, for almost 20 years there have been two main abbreviations: Aml and KYC.

What it is

Aml – Anti Money Laundering.

Aml – a policy aimed at combating money laundering. This is a certain set of measures that comply with legal entities to combat illegal financial activities. AML policy includes identification (KYC), storage and exchange of information about users between organizations and departments.

Banks, exchanges and investment funds check the business if they notice work mainly in cash, withholding money in different banks, investing through brokers and buying cash tools.

KYC – the principle of activity that monitors identification of the client’s personality by collecting information. You are asked to provide passport data when you take a loan at the bank, make a deposit or just open a card, set limits on transfers – all this is KYC.

The bank or exchange using KYC determines the portrait of its client, identify the user (passport data, property information), monitor transactions, compare data on the quantity and content of transfers, counterparties, material support for the client. KYC is a special case of AML policy, the terms are not interchangeable.

Why are KYC and aml needed

Banks use KYC and AML policy when issuing a loan and be sure to ask a passport and phone numbers. Legal bookmakers also use KYC: when opening the account, you need to provide passport data and confirm it at the reception point or by video. Similar requirements for stock exchanges and pawnshops. Depositors do not lose money, and the governments of the countries are fighting illegal turnover of money.

In the field of blockchain, thanks to the KYC and Aml policy, customers receive a quick withdrawal of currency in real money, the legality of cryptocurrency and operations security. The user knows: the token came to him has not previously been used in illegal procedures.

KYC and AML are not a violation of the user’s “anonymity”, but a guarantee of transactions security. The client may be sure:

  • Trading on the platform is safe;
  • He is protected from fraud;
  • It replenishes the account directly without an on -oncred;
  • Restoring the account in case of loss of access will be easy.

According to AML policy, the exchange checks the history of transactions of each user, and it cannot be faked. So the exchange protects itself from illegal activity and ensures transparency of transactions. AML policy includes monitoring and evaluating transaction risks, checking cryptocurrency for cleanliness.

KYC and AML requirements in cryptocurrency exchanges are found when creating a personal account. So that users are more willing to leave their data, the owners of the service introduce a restriction on the term for the withdrawal, the amount of funds for entry and withdrawal.

How KYC https://gagarin.news/news/the-wagmi-crypto-casino-presented-its-first-nft-collection/ and AML work in Russia

In Russia, KYC requirements are implemented by the Federal Law of 07.08.2001 N 115-ФЗ and the Committee of the Russian Federation on Financial Monitoring.

KYC and aml strict schemes each exchange or bank regulates itself. To draw up a credit card up to 50 thousand. Most banks need to only enter passport data, but in some banks they demand to come to the department. In banks, it is not customary to call the AML and KYC procedures, respectively, rather they will simply write there “.

Most cryptocurrency services where verification is needed accept Russian passports. Some prefer to work without verification at all.


KYC and AML in the modern world are simply necessary, for safer work with finances on various services or exchanges. Therefore, the passage of the verification procedure will soon become a banal thing.

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