What it means
A program of controls
AML can involve risk assessment, customer due diligence, recordkeeping, monitoring and reporting. Which duties apply depends on the activity, entity type and jurisdiction; the term does not describe one universal checklist for every merchant.
Know the scope
Identity verification is one component of many AML frameworks. A successful identity check alone does not establish that transactions are lawful or satisfy ongoing obligations. Businesses should distinguish their own responsibilities from those assigned to a payment provider and maintain evidence of the applicable processes.
Related concepts
In practice
A concrete example
A business documents its role and jurisdiction, then determines which onboarding, monitoring and reporting obligations apply to its actual services.
Technical notes & boundaries
The linked FinCEN materials describe US requirements. They are not a determination that every crypto merchant is a covered financial institution or money transmitter.
Go to the source.
Original references used for this definition. Product details and standards can change.