AML (Anti-Money-Laundering)

AML — Anti-Money-Laundering — is the regulatory framework that requires financial institutions to detect and report the movement of illicit funds through their systems. It typically consists of three pillars: customer identity verification (KYC), ongoing transaction monitoring for suspicious patterns, and reporting to regulators when thresholds or red flags trigger (Suspicious Activity Reports, Currency Transaction Reports).

In crypto, AML obligations attach to custodial and licensed services: centralized exchanges, custodial wallets, money transmitters, and payment processors that hold or move customer funds. Chain-analysis firms (Chainalysis, Elliptic, TRM Labs) sell tooling that helps regulated services score wallet addresses and flag transactions linked to sanctioned entities, known hacks, ransomware, mixers, or darknet markets.

Non-custodial services like SwapZilla do not offer accounts and do not custody funds, so most jurisdictions currently do not require them to run AML on end users. Merchants integrating a non-custodial API remain responsible for their own AML obligations if their product model requires them — SwapZilla is transparent that AML/KYT is not our surface and does not attempt to substitute for the compliance stack a regulated business needs.