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Increasing AML Compliance Obligations in the Cryptocurrency Industry

Increasing AML Compliance Obligations in the Cryptocurrency Industry

Last Updated on Aug 12, 2025, 2k Views

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Increasing AML Compliance Obligations in the Cryptocurrency Industry

1. Why AML Compliance in Crypto is Tightening

The cryptocurrency industry has seen a rapid increase in regulatory oversight due to:

  • Rising illicit use of digital assets for money laundering, terrorist financing, and ransomware.

  • Global pressure from the Financial Action Task Force (FATF) to implement the “Travel Rule” and other AML standards.

  • High-profile enforcement cases involving exchanges and crypto service providers.

  • Mainstream adoption by institutional investors and banks, driving alignment with traditional finance rules.

2. Key Areas of Increasing AML Obligations

A. Regulatory Expansion

  • Travel Rule Compliance
    FATF now expects Virtual Asset Service Providers (VASPs) to collect, verify, and transmit sender and receiver information for transactions over a certain threshold.

  • Beneficial Ownership Transparency
    More jurisdictions are requiring disclosure of ultimate beneficial owners (UBOs) for crypto businesses and accounts.

  • KYC for DeFi & NFTs
    Regulators are expanding AML/KYC rules beyond centralized exchanges to cover decentralized platforms, NFT marketplaces, and stablecoin issuers.

B. Enhanced Customer Due Diligence (CDD)

  • Risk-based onboarding for individuals and corporate clients, especially those from high-risk jurisdictions.

  • Ongoing monitoring for suspicious wallet addresses and blockchain activity.

  • Screening against sanctions lists (OFAC, EU, UN) and PEP lists.

C. Blockchain Transaction Monitoring

  • Advanced analytics tools like Chainalysis, TRM Labs, Elliptic are becoming essential for:

    • Detecting suspicious transaction patterns.

    • Identifying mixers, tumblers, and high-risk wallets.

    • Flagging links to darknet markets or sanctioned entities.

  • Regulators expect continuous and retrospective monitoring.

D. Reporting Obligations

  • Suspicious Activity Reports (SARs) must be filed for questionable transactions, just as in traditional banking.

  • Cross-border transaction reporting is increasingly required.

  • Recordkeeping requirements are being harmonized with traditional finance — in many countries, crypto firms must keep records for 5–10 years.

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3. Enforcement Trends

  • Hefty penalties: In 2024–2025, several crypto exchanges faced fines exceeding $1B for AML failures.

  • Licensing revocations: Regulators have shut down VASPs failing to meet AML standards.

  • Executive liability: More cases are holding CEOs and compliance officers personally accountable.

4. Global Developments

RegionKey Update
USFinCEN expanding AML rules to include mixers, privacy coins, and certain DeFi operators.
EUNew AMLA authority to directly supervise large crypto entities under AMLD6.
UKFCA tightening registration and ongoing compliance checks for crypto firms.
Asia-PacificSingapore, Japan, and Hong Kong enforcing Travel Rule and licensing requirements.
Middle EastUAE and Bahrain enhancing crypto AML audits under VARA and CBB rules.

5. Industry Impact

  • Higher compliance costs for crypto firms.

  • Shift toward regulated, transparent operations to maintain banking relationships.

  • Innovation in RegTech — more firms integrating AI-powered KYC and blockchain analytics.

6. Strategic Recommendations for Crypto Businesses

  • Adopt Travel Rule-ready solutions.

  • Implement real-time blockchain monitoring.

  • Enhance risk-based KYC procedures.

  • Conduct independent AML audits.

  • Train staff regularly on emerging crypto risks.

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    AML/CFT Guide For Digital Bank

    AML/CFT Guide for Digital Bank

    Last Updated on Aug 12, 2025, 2k Views

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    AML/CFT Guide For Digital Bank

    1. Introduction

    Purpose:
    To outline the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) compliance framework for a digital bank, ensuring adherence to global and local regulations while leveraging technology for efficiency.

    Regulatory Basis:

    • FATF Recommendations – International standards.

    • Local AML/CFT Laws – Example: India’s PMLA, EU’s AMLD, U.S. BSA/USA PATRIOT Act.

    • Regulator Guidelines – e.g., RBI, MAS, FCA.

    2. Governance & Responsibility

    • Board of Directors – Sets AML/CFT policy and risk appetite.

    • Compliance Committee – Oversees implementation, reviews reports, approves escalation protocols.

    • Money Laundering Reporting Officer (MLRO) – Senior officer responsible for suspicious activity reporting.

    • Operational Teams – KYC onboarding, transaction monitoring, and investigation teams.

    3. Risk Assessment

    Key Risk Categories for a Digital Bank:

    • Customer Risk – High-risk jurisdictions, politically exposed persons (PEPs), complex structures.

    • Product/Service Risk – Cross-border payments, instant transfers, virtual assets.

    • Channel Risk – Fully online onboarding, mobile app transactions.

    • Geographic Risk – Sanctioned countries, FATF high-risk jurisdictions.

    Methodology:

    • Conduct Enterprise-Wide Risk Assessment (EWRA) annually.

    • Use Risk Scoring Models for customers and transactions.

    4. Customer Due Diligence (CDD) & eKYC

    Onboarding Requirements:

    • Digital Identity Verification – Facial biometrics, liveness detection, OCR document scanning.

    • Sanctions & PEP Screening – Against OFAC, UN, EU, HMT, and local lists.

    • Beneficial Ownership Checks – For entities, identify and verify individuals with >25% ownership.

    CDD Tiers:

    • Simplified Due Diligence (SDD) – Low-risk accounts (e.g., small savings).

    • Standard CDD – Regular retail customers.

    • Enhanced Due Diligence (EDD) – High-risk customers such as PEPs, offshore entities, crypto-related businesses.

    5. Ongoing Monitoring

    • Automated Transaction Monitoring – AI/ML models to detect anomalies, pattern recognition, and rule-based alerts.

    • Behavioral Profiling – Compare actual activity to expected customer behavior.

    • Periodic KYC Updates – Risk-based frequency (e.g., high-risk: annually, low-risk: every 3–5 years).

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    6. Sanctions & Watchlist Screening

    • Real-Time Screening – For customer onboarding and transactions.

    • Batch Screening – Daily re-screening of existing customer base.

    • List Sources – OFAC, UN, EU, HMT, domestic watchlists, and adverse media feeds.

    7. Suspicious Activity Reporting (SAR/STR)

    • Internal Escalation – Alerts → Investigator → MLRO review.

    • Reporting Timelines – As per jurisdiction (e.g., 24–72 hours).

    • Confidentiality – Prohibition on “tipping off” customers.

    8. Record Keeping

    • Maintain KYC documents, transaction records, investigation notes for at least 5–10 years depending on regulation.

    • Ensure secure, encrypted storage with audit trail.

    9. Training & Awareness

    • Mandatory Annual Training – AML/CFT, sanctions, typologies, red flags.

    • Role-Specific Modules – Onboarding staff, investigators, developers.

    • Testing & Certification – Post-training assessments to ensure understanding.

    10. Technology & RegTech Integration

    • Identity Verification Tools – Onfido, Jumio, Trulioo.

    • Transaction Monitoring Systems – Actimize, Feedzai, ComplyAdvantage.

    • Adverse Media Screening – Dow Jones, World-Check, Refinitiv.

    • Machine Learning Models – Adaptive to evolving typologies and fraud patterns.

    11. Reporting to Regulators

    • Regular Returns – STRs/SARs, CTRs, threshold transactions, and AML compliance reports.

    • Audit Support – Provide system logs, case files, and compliance dashboards during inspections.

    12. Continuous Improvement

    • Annual Policy Review and updates.

    • Implement lessons from internal audits, regulatory feedback, and enforcement cases.

    • Monitor emerging threats – crypto laundering, AI-based fraud, mule accounts.

    Appendix – Common AML/CFT Red Flags for Digital Banks

    • Frequent small deposits followed by large withdrawals.

    • Account activity inconsistent with stated income or occupation.

    • Use of multiple accounts with no clear business purpose.

    • Rapid movement of funds through multiple countries.

    • Transactions involving high-risk jurisdictions or sanctioned entities.

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      What is a Sanction list?

      What is a Sanction List?

      Last Updated on Aug 12, 2025, 2k Views

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      What is Sanction list ?

      A sanctions list is an official list of individuals, companies, organizations, vessels, or countries that are subject to restrictions or prohibitions imposed by a government, international body, or regulatory authority.

       

      •  

      These restrictions are usually put in place for reasons like:

      • National security (preventing threats or hostile actions)

      • Foreign policy (pressuring governments or regimes)

      • Human rights protection (punishing those involved in abuses)

      • Counter-terrorism (blocking funding or support to terrorist groups)

      • Anti–money laundering (AML) and counter–terrorist financing (CFT)

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      What’s in a sanctions list:

      • Names of sanctioned entities (people, businesses, groups)

      • Aliases (other names they use)

      • Identifiers (passport numbers, dates of birth, addresses)

      • Sometimes reasons for the sanction

      Examples of major sanctions lists:

      • OFAC SDN List (U.S. Treasury – Office of Foreign Assets Control)

      • United Nations Consolidated List

      • European Union Sanctions List

      • UK OFSI Sanctions List

      Impact:
      If someone or something is on a sanctions list, financial institutions and businesses are generally prohibited from doing business with them, must freeze their assets, and report the activity to relevant authorities.

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        Top 5 AML Penalties in 2025

        Top 5 AML Penalties in 2025

        Last Updated on Aug 12, 2025, 2k Views

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        Top 5 AML Penalties in 2025

        OKX (crypto exchange operator)

        • Penalty: Nearly US $505 million in fines and forfeitures
        • Details: Paid a US$84.4 million fine and US$420.3 million in forfeiture for facilitating suspicious transactions, despite restrictions on U.S. users. A compliance monitor is required until February 2027.
        •  

        TD Bank

        • Penalty: Over US $3 billion in total penalties (including DOJ and FinCEN), stemming from long-standing AML failures.

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        Barclays

        • Penalty: £42 million (~US$51 million+) for inadequate AML controls related to handling high-risk clients.

        Revolut (by Bank of Lithuania)

        • Penalty: €3.5 million (~US$3.8 million) – the regulator’s largest fine to date, for AML monitoring shortcomings.

        • Honorable Mention

          • Monzo (UK): Fined £21 million for weak transaction monitoring and onboarding failures.
            LinkedIn

          • Fine actions in the UAE: Over Dh 339 million (~US$92 million+) in cumulative fines across multiple institutions in a sweeping AML crackdown.

        LPL Financial

        • Penalty: US $3 million fine in March 2025 for AML program failures related to penny stock trading.

        • Observations

          • The trend in 2025 continues to spotlight crypto platforms and digital financial services—like OKX, Revolut, LPL, and Monzo—as primary targets for AML enforcement.

          • Traditional banks (e.g. TD Bank, Barclays) still face large-scale penalties, underscoring that both legacy institutions and modern fintech/platforms must uphold strong compliance systems.

          • Fines range from a few million dollars for emerging firms to multi-billion-dollar settlements for systemic failures.

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          A Guide to AML/CFT Compliance in India

          A Guide to AML/CFT Compliance in India

          Last Updated on Aug 04, 2025, 2k Views

          Top AML-KYC Tools Explained: Purpose, Features & How to Use Them (2025 Guide)

          A Guide to AML/CFT Compliance in India

          1. Regulatory Framework

          • India’s Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) compliance is governed by the following:

          • Prevention of Money Laundering Act (PMLA), 2002 – Primary legislation.

          • PMLA Rules – Operational guidelines.

          • Reserve Bank of India (RBI) – For banks and NBFCs.

          • SEBI – For securities market intermediaries.

          • IRDAI – For insurance companies.

          • FIU-IND – Financial Intelligence Unit for suspicious transaction reporting.

          2.Key Obligations for Reporting Entities

          • Entities such as banks, NBFCs, mutual funds, payment systems, and others must:

          • Maintain KYC Records: Follow RBI’s KYC Master Direction.

          • Conduct Customer Due Diligence (CDD):

          • Identify and verify customers and beneficial owners.

          • Risk-based approach for CDD (Low/Medium/High risk).

          • File Reports to FIU-IND:

          • CTR: Cash Transaction Report (₹10 lakh and above).

          • STR: Suspicious Transaction Report.

          • NTR: Non-Profit Organization Transaction Report (for NGOs).

          • Ongoing Monitoring: Transactions must be continuously monitored for red flags.

          • Record Keeping: Maintain transaction records for at least 5 years.

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          3. Customer Due Diligence (CDD)

          CDD Includes:

          • Verification of identity using Aadhaar, PAN, Passport, etc.

          • Beneficial Ownership: Especially for companies and trusts.

          • Enhanced Due Diligence (EDD) for high-risk clients (PEPs, NGOs, cross-border entities).

          • Periodic KYC Updates: Based on customer risk rating.

          4. Risk-Based Approach (RBA).

          Institutions must:

          • Categorize customers by risk level.

          • Apply controls proportionate to the risk:

          • Low: Basic verification.

          • High: Enhanced due diligence, source of funds checks.

          • Review risk ratings periodically.

          5. Screening & Sanctions Compliance

          • Screen customers and transactions against:

          • UN Sanctions Lists (as notified by Ministry of External Affairs).

          • Domestic blacklists (RBI defaulters, SEBI debarred entities, etc.).

          • OFAC/PEP databases (if international exposure exists).

          • Maintain systems for automated screening and alert management.

          6. Training & Internal Controls.

          • AML/CFT training for all staff—especially frontline and compliance teams.

          • Designate a Principal Officer (PO) to report to FIU-IND.

          • Appoint a Designated Director responsible for overall compliance.

          • Perform internal audits and system validations regularly.

          7. Technology in AML/CFT

          Use AML software for:

          • Transaction monitoring

          • Pattern detection

          • Automated alerts

          • Case management

          • Examples: Tookitaki, ComplyAdvantage, NameScan, etc.

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            8. Penalties for Non-Compliance

            Under PMLA: Fines, imprisonment, or both.

            • Regulatory action by RBI, SEBI, or FIU-IND:

            • Penalties

            • Suspension or cancellation of license

            • Public reprimands

            • Practical Tips for Compliance Teams

            • Conduct regular risk assessments.

            • Keep AML/CFT policies updated with global best practices.

            • Establish a whistleblower policy for internal reporting.

            • Ensure board-level oversight on compliance effectiveness.

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            Global AML Updates

            Global Aml Updates

            Last Updated on Aug 04, 2025, 2k Views

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            Global AML Updates 2025

            1. Financial Action Task Force (FATF)

            • Guidance update (June 22, 2025) on promoting financial inclusion through a risk‑based approach. It reinforces FATF Recommendation 1 and includes new case studies across sectors

            • High-risk listings (as of Feb–June 2025): The FATF “blacklist” still includes Iran, DPRK (North Korea), and Myanmar. The “grey list” now comprises 25 jurisdictions (e.g., Algeria, Angola, Kenya, Nepal, Venezuela)

            2. European Union (EU)

            • AMLR & AMLD6 rollout: Regulations 2024/1620 and 2024/1624 modernize AML/CFT rules. They strengthen beneficial ownership transparency, create centralized bank and securities registers, revise sanctions regimes, and expand supervisory powers. AMLA, the new EU AML Authority, will begin operations mid‑2025, with full functionality by 2028/29
            • June 2025 delegated updates: The European Commission added new jurisdictions to its high-risk third-country list (e.g. Algeria, Kenya, Monaco), while delisting the UAE, Gibraltar, Barbados, Panama and others Financial Times
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            3. United States

            • FinCEN’s extended deadlines (July 2025): U.S. institutions now have until September 4, 2025, to implement prior notices related to Mexico-based financial groups

            • Investment Advisers now FIR-regulated: A final rule (published Sept 4, 2024) brings Registered Investment Advisers (RIAs) and Exempt Reporting Advisers (ERAs) under AML/CFT regimes. Compliance deadlines were extended to January 1, 2028 for full implementation, SAR filing, and enhanced program rollouts

            • Corporate Transparency Act review: Beneficial ownership reporting now affects only foreign entities; domestic filings are exempt, easing burdens on U.S.-based companies

            4. United Kingdom

            • UK Money Laundering Advisory Notice update (March 27, 2025): HM Treasury revised its list of high-risk third countries following FATF’s plenary meeting earlier in 2025

            • FCA cash-based ML guidance (April 2, 2025): Financial Conduct Authority issued strengthened expectations for firms handling cash transactions and strengthening controls against cash-based laundering

            5. Australia

            • AML/CTF Bill 2024: Proposes expansion of AML/CTF scope to include professionals like lawyers and accountants. Failure to pass may risk Australia’s grey-listing by FATF in 2026. Frame includes risk-based proportionality for smaller firm
            • Emerging Global Trends
            • Tech & AI adoption: Regulators and firms are increasingly embracing real-time transaction monitoring, ML/AI-based risk scoring, and automation to scale AML effectiveness and reduce false positives
            • Unified global standards: There’s movement toward harmonization via risk-based approaches and improved transparency—particularly in the EU and UK, which are aligning more closely with FATF standards
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              Mock Interview Script (Entry-Level AML/KYC Role)

              Mock Interview Script (Entry-Level AML/KYC Role)

              Last Updated on Aug 04, 2025, 2k Views

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              Mock Interview Script (Entry-Level AML/KYC Role)

              Interviewer: Tell me about yourself.

              • You:

              “I’m a [your current or most recent role, e.g., recent graduate in accounting / customer service professional] with strong attention to detail and a growing interest in financial crime prevention. I’ve recently completed a certification in AML/KYC where I learned about customer due diligence, transaction monitoring, and red flags in money laundering. I’m now looking to apply those skills in a compliance-focused environment and grow into an AML analyst or KYC specialist role.”

              Interviewer: What is AML and why is it important?

              • You:

                “AML stands for Anti-Money Laundering. It includes policies and procedures used by financial institutions to detect and prevent money laundering, terrorism financing, and other financial crimes. It’s important because it protects the financial system from abuse and ensures institutions meet regulatory obligations.”

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              Interviewer: Can you walk me through a basic KYC process?

              • You:
                “Sure. A basic KYC process starts with collecting identification documents from the customer—like a passport, utility bill, or company registration papers for businesses. The next step is verifying the identity, checking if the customer is a politically exposed person (PEP) or on a sanctions list. Then, a risk rating is assigned. For higher-risk customers, enhanced due diligence (EDD) is performed. Finally, the account is monitored continuously for suspicious activity.”

              Interviewer: What would you do if you noticed suspicious activity?

              • You:
                “I would follow the company’s escalation procedure. First, I’d gather all relevant transaction details, ensure the facts are documented clearly, and then report the case to the compliance officer or designated investigator. If it meets the internal threshold, a Suspicious Activity Report (SAR) would be prepared.”

              Interviewer: Do you have experience with Excel or any compliance tools?

              • You:

              “Yes, I’m comfortable using Excel for data entry, filtering, and basic analysis like identifying patterns or anomalies. While I haven’t yet used compliance tools like World-Check or Actimize in a live environment, I’ve watched training demos and completed coursework to understand how they support sanctions screening and transaction monitoring.”

              Interviewer: Why do you want to work in AML/KYC?

              • You:
                “I’m really interested in financial crime prevention and regulatory compliance. AML/KYC roles combine research, risk assessment, and investigative work—areas that align with both my skills and interests. I also value working in a field that contributes to public trust and global financial integrity.”

              Interviewer: Any questions for us?

              • You:
                “Yes, thank you. What kind of onboarding or training do new hires receive? Also, what does growth look like in your AML/KYC team over the next year?”

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                Sanction Screening process in AML KYC

                Sanction Screening process in AML KYC

                Become a Certified Professional

                Sanction Screening process in AML KYC

                Last Updated on Jun 05 2025, 2k Views

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                Sanction Screening

                Sanction Screening Process in AML/KYC is a critical component of a financial institution’s compliance program, aimed at preventing transactions with individuals, entities, or countries subject to economic or trade sanctions. Here’s a step-by-step overview of the Sanction Screening process:

                1. Data Collection

                Collect customer details during Customer Due Diligence (CDD) or Know Your Customer (KYC) onboarding.

                Key data fields include:

                Full Name

                Date of Birth

                Nationality

                Address

                Identification Numbers (Passport, PAN, etc.)

                Business/Organization details (for entities)

                2. List Aggregation

                Sanction screening uses updated lists from official authorities like:

                OFAC (U.S. Office of Foreign Assets Control)

                UN Sanctions List

                EU Sanctions List

                UK HMT Sanctions List

                Local regulators (e.g., SEBI, RBI in India)

                Third-party list providers (e.g., World-Check, Dow Jones, Refinitiv)

                3. Screening Types

                There are two main types of sanction screening:

                a. Customer Screening (Name Screening)

                Performed during onboarding and periodically (Ongoing Due Diligence).


                Checks customer names against sanctions lists.

                b. Transaction Screening

                Real-time screening of transactions (e.g., SWIFT messages).

                Verifies that sender/receiver names, intermediaries, and involved countries are not sanctioned.

                4. Matching Logic

                Uses logic and algorithms to match names (considering spelling variations, aliases, transliteration).

                Uses phonetic and linguistic rules.

                5. Alert Generation

                If a match is found, the system raises an alert.

                Alerts can be:

                True Positive: Legitimate match

                False Positive: Non-matching individual/entity that appears similar

                6. Alert Review and Escalation

                Compliance analysts investigate alerts using:

                Customer KYC documents

                Additional screening tools

                Public databases (e.g., news, registries)

                Actions taken:

                Escalate to MLRO (Money Laundering Reporting Officer)

                File STR/SAR (Suspicious Transaction Report)

                Block/hold transactions

                Report to regulators

                7. Ongoing Monitoring

                Periodic re-screening of customers as part of Ongoing Due Diligence (ODD).

                Sanction lists are updated frequently – systems must stay up-to-date.

                8. Record Keeping & Audit

                Maintain logs of:

                Screening results

                Decisions taken

                Alert resolution process

                Regulatory filings

                Tools Used

                Dow Jones Watchlist

                Refinitiv World-Check

                Fircosoft

                LexisNexis Bridger Insight

                Accuity

                SAS AML

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                AML/KYC Interview Questions: Advanced Preparation Guide (2025 Edition)

                AML/KYC Interview Questions: Advanced Preparation Guide (2025 Edition)

                Become a Certified Professional

                AML/KYC Interview Questions: Advanced Preparation Guide (2025 Edition)

                Last Updated on Jun 03 , 2025, 2k Views

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                AML / KYC

                AML/KYC Interview Questions: Advanced Preparation Guide (2025 Edition)

                If you're targeting roles in Transaction Monitoring, Compliance, or Due Diligence — these 15 advanced questions will help you stand out in interviews

                Top 15 Advanced AML/KYC Questions & Answers

                1. What is FATF?

                The Financial Action Task Force sets international standards to prevent money laundering and terrorist financing.

                2. False Positive vs. False Negative?

                False Positive: Genuine transaction flagged incorrectly

                False Negative: Suspicious transaction that goes undetected

                3. What is a Correspondent Banking Relationship?

                When one bank provides cross-border services to another — considered high-risk due to lack of direct oversight.

                4. What is a Beneficial Owner in KYC?

                A person who directly or indirectly owns ≥25% of a legal entity or exercises control over it.

                5. KYC vs. CDD?

                KYC: Initial identity verification

                CDD: Ongoing monitoring and risk assessment

                6. What is Smurfing?

                Splitting large illicit funds into smaller transactions to evade detection.

                7. What is a Risk-Based Approach (RBA)?

                Tailoring due diligence intensity to customer risk — focusing more on high-risk profiles.

                8. Structuring vs. Smurfing?

                Structuring: Breaking up transactions to avoid thresholds

                Smurfing: Using multiple people to do so on behalf of one party

                9. What is Trade-Based Money Laundering (TBML)?

                Using trade (falsified invoices, mispriced goods) to conceal illicit funds.

                10. What is an Ultimate Beneficial Owner (UBO)?

                The individual who ultimately benefits from or controls a company, even behind layers of ownership.

                11. What is Ongoing Monitoring?

                Post-onboarding transaction and profile reviews to detect new risks.

                12. Purpose of Customer Risk Rating (CRR)?

                To classify clients as Low, Medium, or High risk and apply appropriate controls.

                13. What is PEP Screening?

                Identifying Politically Exposed Persons to mitigate corruption and reputational risk.

                14. What is a Watchlist in AML?

                A list of entities or persons flagged for sanctions, criminal history, or financial risk.

                15. What is a Suspicious Activity Report (SAR)?

                A confidential report filed with authorities to flag transactions that raise suspicion.

                Save this guide if you're prepping for a role in AML, KYC, or Financial.

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                How AML KYC work & what are the Different Process

                How AML KYC Work & What are the Different Process

                Become a Certified Professional

                Anti Money Laundering

                Last Updated on May 23 , 2025, 2k Views

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                Anti money Laundering Course

                Anti Money Laundering

                How Anti-Money Laundering Really Works (and why you should care)

                AML isn’t just paperwork.

                It’s a 24/7 defense system against financial crime.

                Here’s what actually goes on behind the scenes:

                1. Customer Due Diligence (CDD)

                Basic ID checks

                Verify address + source of funds

                If you’re low-risk, you get the fast lane

                2. Enhanced Due Diligence (EDD)

                High-risk customer? Welcome to the deep dive.

                Think: Politically Exposed Persons (PEPs), offshore accounts

                More documents. More scrutiny. More time.


                3. Ongoing Monitoring

                Every. Single. Transaction. Is. Watched.

                Spotted a weird transfer at 2 a.m.? That’s a red flag.

                Patterns matter — not just one-offs.

                4. Suspicious Activity Reports (SARs)

                Something doesn’t feel right?

                Compliance flags it + files a SAR

                Goes straight to the regulators — no debate

                5. Sanctions Screening

                Global watchlist checks on every customer

                Match a sanctioned entity?

                Your account is frozen. Instantly.

                6. KYC Refreshes

                “Know Your Customer” isn’t a one-time event

                Periodic updates (especially if risk increases)

                New job? New country? New scrutiny.

                Real Talk:

                AML is not a checkbox.

                It’s a living, breathing system that evolves with every risk signal.

                Now imagine doing all this without automation?

                (That’s why RegTech is booming.)

                If you’re in FinTech, Compliance, or Legal—

                You need to know this process inside out.

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