Anti money laundering warning
In exchange on this website, we will verify the customer's identity or prevent potential money laundering when we think it is necessary, although sometimes customers do not know that they have actually become a link in the money laundering chain. Due to lack of understanding of money laundering, they are tempted by interests to exchange suspected of helping money laundering in the name of a certain demand, which also brings risks to both sides of the exchange, including but not limited to the freezing and closing of wallet accounts, And judicial organs, freeze relevant fund accounts until they bear criminal responsibility.
Therefore, please consciously identify and avoid participating in money laundering. We do not accept the exchange behavior suspected of money laundering unless the customer can provide us with sufficient proof. Especially when it comes to the exchange of digital currency and RMB.
The difference between KYC and AML
National and international institutions all over the world regulate the anti money laundering (AML) standards of the financial industry. This imposes strict screening and monitoring procedures on all financial institutions. The steps to implement a successful anti money laundering (AML) program include a key process: "know your customer" (KYC). In general, the terms AML and KYC can be used
interchangeably, which means that they are considered the same thing. However, this is far from the truth, because KYC and AML have very different meanings, especially in the regulatory environment.
In order to successfully comply with anti money laundering regulations, companies must understand AML and KYC, what they are, how they are different, and how they are interrelated in the regulatory process. Financial institutions often use this understanding to implement in their compliance plans through anti money laundering software.
What is know your customer (KYC)?
Understand the basic KYC process of any financial institution. It is defined as the process by which these institutions collect their customer information and verify their identity. This greatly helps them fully assess the risks associated with each customer. For example, all investors must be verified before participating in any ICO or fund-raising activities. Fintech companies must collect a large amount of verifiable information about their customers and their identities in order to determine their legitimacy before starting any business activities.
What is AML?
Anti money laundering (AML) refers to the overall and broader measures and processes used by financial institutions and governments to prevent and combat financial crimes, especially money laundering and terrorist financing. Anti money laundering regulations are developed by global institutions, such as UNODC and [FATF]（ https://www.fatf- gafi. Org /), regional institutions such as FINRA, and local governments and institutions.
The anti money laundering policy is part of the broader and complete anti money laundering compliance plan of financial institutions.
What is the difference between AML and KYC?
The difference between AML and KYC is that, on the one hand, AML (anti money laundering) refers to the general name of all regulatory procedures that the company must implement in order to carry out legitimate business, while on the other hand, KYC (know your customer) is a smaller part of AML, which is composed of companies that verify the identity of customers. This is only one step in a larger process.
Many financial institutions often confuse KYC and AML, blur the boundary between the two processes, and are subject to disciplinary action by regulators. Depending on the seriousness of the crime, they may be fined or even sentenced to imprisonment.
AML / KYC are indeed different and cannot be used interchangeably. Having said that, KYC and AML are interrelated processes.
KYC is the first step in implementing AML plans or policies. This is the process of verifying the identity of the customer. The goal is to gain a deeper understanding of customers and their financial transactions in order to effectively manage risks. KYC is the process to start AML compliance process.
As mentioned earlier, on the other hand, anti money laundering is a larger and broader concept, including the following:
Know your customers
Customer due diligence (CDD), the basic process of verifying customer identity, and enhanced due diligence (EDD), which is a more advanced KYC program, which is mainly used for high-risk customers. These clients are generally more likely to be involved in financial crimes, including money laundering and terrorist financing, and therefore require more thorough verification.
Risk based anti money laundering policy
Continuous risk assessment and continuous monitoring
Anti money laundering compliance training program for employees
Internal control and internal audit
Why do companies confuse AML and KYC?
KYC is a compliance process that forms the first step in a broader AML framework. But it is not uncommon to see financial institutions and companies confuse the two. In addition to customer verification, most companies also use KYC software as a tool to detect fraud. This is just inaccurate because AML compliance is a more complex and detailed process.
The prevention and implementation of anti money laundering requires an in-depth understanding of many factors. From the understanding of local anti money laundering regulations and regional anti money laundering regulations to the successful operation of KC in the financial industry. In addition, they must keep pace with the latest technologies and anti money laundering software on the market.
It is not difficult to imagine why enterprises often confuse KYC and AML. After all, they all play an indispensable role in the financial environment. Most importantly, they are also risk-based approaches. They also share some common features, such as customer identification and risk management. However, it is important to always keep in mind that these processes are not the same and have different functions. This will help you find the right professionals and teams to undertake each task - AML or KYC - and be impartial.
We hope you now understand the definitions of KYC and AML. Although these two processes are different, they complement each other and are interrelated to jointly combat financial crimes. AML and KYC compliance is a necessary condition for all financial institutions that want to conduct legal transactions and avoid illegal transactions.
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