Chống Rửa Tiền (AML) Là Gì?

Chống Rửa Tiền (AML) Là Gì?

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Chống Rửa Tiền (AML) Là Gì?

TL;DR

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.

Introduction

Anti-Money Laundering (AML) regulations help combat the washing of illegal funds. They are a requirement for centralized cryptocurrency exchanges to help keep customers safe and combat financial crime. Due to the anonymous nature of cryptocurrency, its regulation relies heavily on monitoring customer behavior and>

What is AML?

AML consists of regulations and laws that deter the movement and washing of illegal funds. AML is closely associated with the Financial Action Task Force (FATF) set up in 1989 to encourage international cooperation. For example, AML measures>cryptocurrencies. Any asset or fiat currency can be monitored and held to AML regulations.

It’s taken some time for regulation to catch up with cryptocurrencies. As blockchain technology is constantly innovating, AML procedures change regularly along with compliance measures. However, this isn’t always seen as positive. Many cryptocurrency enthusiasts value the asset’s anonymity and decentralization. For this reason, increased regulation and documentation of users’>What’s the difference between AML and KYC?

Know Your Customer (KYC) checks are an obligation for financial institutions and service providers as part of AML laws. KYC requires a user to submit personal information verifying their>What is money laundering?

Money laundering is when criminals make illegal funds appear as legitimate money, investments, or financial assets. The proceeds come from crimes such as drug trafficking, terrorism, and fraud. Laws and regulations combating money laundering differ by country. However, increasing alignment on rules is a goal of many jurisdictions and the FATF.

There are three stages to laundering money:

  • Placement: Introducing “dirty” money into the financial system, such as with a cash-based business.
  • Layering: Moving illegal funds around to make the tracking of them difficult. Using crypto is one way to hide the origin of “dirty” money.
  • Integration: Using legal investments and other financial channels to reintroduce the “dirty” money into the economy.

How do people launder money?

There are multiple ways to achieve the three steps above. A traditional method has been to create fake receipts for cash-based services in shops, restaurants, and other businesses. An individual or organization uses the businesses as fronts for money laundering. Criminals create counterfeit receipts and pay for them with “dirty” physical cash, turning them into legitimate income. This inflow is then mixed in with genuine transactions to make it difficult to distinguish between the two.

However, it’s now common for illegitimate funds to be digital rather than physical cash. This difference changes the methods used to launder money. There are now even more options to hide and wash “dirty” money than before. For example, you can>peer-to-peer services makes tracking the entrance or exit of>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. 

Crypto money laundering examples

Authorities do have some success in tracking and catching criminals who wash their funds via crypto. In July 2021, UK police seized roughly $250 million US of crypto used for money laundering. This seizure was the largest to date in the UK of crypto funds, beating a previous UK record of $158 million set just weeks before. 

In the same month, $33 million was seized by Brazilian authorities in a sophisticated money-laundering operation. Two individuals and 17 companies were involved in purchasing crypto to hide illegally sourced funds. The criminal organization involved set up the companies with this sole purpose in mind. The cryptocurrency exchanges also cooperated with the criminal organizations knowingly and did not follow correct AML procedures.

How does Binance support AML?

Binance has proactively implemented numerous AML measures to help tackle money laundering, including expanding its AML detection and analytics capabilities. These efforts fall under its AML compliance program. Binance also works closely with international agencies in helping bring large cybercriminal organizations to justice.

For example, Binance played a role in providing evidence that led to the arrest of multiple members of the Cl0p ransomware group. Binance flagged suspicious transactions and criminal activity that were then investigated. Authorities used the research in cooperation with international agencies to>cta2

Closing thoughts

While AML adds time to the process of trading cryptocurrencies, it’s important to keep everyone safe. Unfortunately, governments and organizations can’t get rid of all money laundering activities, but the implementation of regulations certainly helps. Technology is improving at spotting possible money laundering, and serious crypto exchanges are taking their role seriously in helping to tackle crime.

Chống Rửa Tiền (AML) Là Gì?
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