AML: Navigating the Global Regulatory Maze
Anti-Money Laundering (AML) is no longer just for banks. In the Web3 era, every institutional participant must understand the requirements.
The FATF Travel Rule
The Financial Action Task Force (FATF) Recommendation 16 requires Virtual Asset Service Providers (VASPs) to share "originator" and "beneficiary" information for transactions over a certain threshold.
MiCA (Markets in Crypto-Assets)
The EU's MiCA regulation is the first comprehensive framework for crypto-assets.
- Asset Service Providers: Must be licensed and follow strict prudential requirements.
- Stablecoins: Must maintain high-liquidity reserves and undergo regular audits.
Sanctions Screening
Institutions must screen every address they interact with against lists from:
- OFAC (USA)
- UN Security Council
- HM Treasury (UK)
📋 Security Checklist: Institutional Compliance Program
- Risk Assessment: Have you documented the specific risks associated with each protocol you use?
- Transaction Monitoring: Do you have an automated tool (e.g., Chainalysis, Elliptic) to flag high-risk transfers?
- Vetted Counterparties: Are your OTC desks and market makers fully licensed and KYB'd?