&nbsp;Under the regulation of FATF (Financial Action Task Force), countries and international organizations all over the world have the corresponding anti-money laundering (AML) standards to supervise the financial industry and some non-financial industries (such as jewelry shops and silverware shops).&nbsp;The steps to implement a successful anti-money laundering program include a key process: "Know Your Customer" (KYC). Usually, “KYC and AML” will be mentioned together and used interchangeably, which they seem to be regarded as the same thing. However, that is not the case, because the meanings of KYC and AML have a large difference, especially in the regulatory environment and legal norms.&nbsp;In order to successfully comply with anti-money laundering regulations, companies must know what KYC and AML are, their differences and how they are related to each other in the regulatory process.<h1>What is “Know Your Customer (KYC)”?</h1>Know Your Customer (KYC) is a fundamental process of any financial institution's anti-money laundering program. It is defined as the process by which these agencies collect information about their customers and verify their identities. This greatly helps them fully assess the risks associated with each client. For example, all investors must be verified before participating in any ICO or crowdfunding campaign. Fintech companies are mandated to collect vast amounts of verifiable information about their customers and their identities in order to determine their legitimacy before starting any business activity.<h1>What is AML?</h1>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 for money laundering and terrorist financing). Anti-money laundering regulations are decided by global institutions such as UNODC and FATF on money laundering, regional institutions such as FINRA, and local governments and institutions.The anti-money laundering policy is part of a broader and more complete anti-money laundering compliance plan of financial institutions.<h1>The difference between AML and KYC</h1>The difference between AML and KYC is that, on the one hand, AML (anti-money laundering) is the general term of all regulatory procedures that enterprises must implement in order to carry out legitimate business. On the other hand, KYC (know your customers) is a smaller portion of AML, and it consists of companies that aim to verify the identity of their customers. This is just one step in a larger process.Many financial institutions often feel confused when it comes between KYC and AML. They blurred the boundary between the two processes, which lead to being disciplined by regulatory authorities. Depending on the seriousness of the error, they may be fined or even sentenced to imprisonment.Indeed, AML and KYC are different and cannot be used interchangeably. Having said that, KYC and AML are closely related and interrelated.Customer due diligence (CDD) is the basic process of customer identification program, while enhanced due diligence (EDD) is a more advanced KYC process which is mainly used for high-risk customers that cannot be excluded through simple CDD steps. These customers are usually more likely to be involved in financial crimes including money laundering and terrorist financing, so they need more thorough verification.KYC is the first step in implementing AML procedures or policies. It is the process of verifying the identity of customers. The purpose is to have a deeper understanding of customers and their financial transactions, so as to effectively manage risks. KYC is the process that AML follows and starts. As mentioned above, AML is a larger and broader concept, including customer due diligence, risk-based anti-money laundering policy, continuous risk assessment and ongoing monitoring, employee anti money laundering compliance training program, internal control and internal audit.&nbsp;<img src="https://storage.googleapis.com/kryptogo-website.appspot.com/public/cms/difference_form_41e2f7c7e5/difference_form_41e2f7c7e5.png" alt="difference form.png" srcset="https://storage.googleapis.com/kryptogo-website.appspot.com/public/cms/thumbnail_difference_form_41e2f7c7e5/thumbnail_difference_form_41e2f7c7e5.png 245w,https://storage.googleapis.com/kryptogo-website.appspot.com/public/cms/small_difference_form_41e2f7c7e5/small_difference_form_41e2f7c7e5.png 500w,https://storage.googleapis.com/kryptogo-website.appspot.com/public/cms/medium_difference_form_41e2f7c7e5/medium_difference_form_41e2f7c7e5.png 750w,https://storage.googleapis.com/kryptogo-website.appspot.com/public/cms/large_difference_form_41e2f7c7e5/large_difference_form_41e2f7c7e5.png 1000w," sizes="100vw">The difference between KYC &amp; AML<h1>Why would company mix up AML and KYC?</h1>KYC is the compliance process, which constitutes the first step in the broader AML framework. However, it is common to see financial institutions and companies confuse the two. Most companies use KYC system as a tool to detect fraud, and anti-money laundering compliance is a more complex and detailed process.Preventing and implementing anti-money laundering requires an in-depth understanding of many factors. From the internal operation of the financial industry to the understanding of local, regional, national and international anti-money laundering regulations and rules, successful anti-money laundering professionals must have skills beyond KYC. In addition, they must keep up to date with the latest technologies and AML software on the market.It is not difficult to imagine why companies often confuse KYC and AML. After all, they all play an indispensable role in finance. Most importantly, they are risk-based approaches. They also have some common functions, such as customer identification and risk management. But it is important to always remember that these processes are different and have multiple functions.<h1>The most critical differentiation</h1><ul><li>KYC: It’s more about the identification process and method used prior to customer acceptance, and the regular due diligence after acceptance.</li><li>AML: Usually discusses the post-acceptance measure, especially transaction and behavioral controls.</li></ul>This will help you find the right professional and team to complete each task (AML or KYC) and comply with the regulations.We hope this article has helped you understand the definitions of KYC and AML. While these two processes are different, they are complementary and interconnected, and they work together to combat financial crimes. AML and KYC must be followed by all financial institutions that want to conduct legal transactions and avoid breaking the law.&nbsp;<blockquote>About KryptoGOKryptoGO is the most advanced financial monitoring and investigation engine to help financial institutions quickly identify high money laundering risks. Through AI technology to help automate the regulatory process, combined with DLT technology to exchange and share industry data, the search covers a list of mainstream financial industry sanctions (for 200+ countries) and instantly analyzes digital footprints on the Internet to quickly understand all the background information of the target, analyze the context to read relevant sensitive words, sentiment, money laundering risks, and use the features that appear in the context to save up to 80% of the time spent on due diligence.</blockquote>

Under the regulation of FATF (Financial Action Task Force), countries and international organizations all over the world have the corresponding anti-money laundering (AML) standards to supervise the financial industry and some non-financial industries (such as jewelry shops and silverware shops). 

The difference between KYC & AML?

The Press F Experiment: June 4, 2025

It’s a Date! Vibe Coding Workshop: May 22, 2025

Unlocking Web3 Potential: Real-World Applications of KryptoGO Wallet

Meet KryptoGO Pay: April 30, 2025

Yua Mikami Ignites Solana Meme Coin $MIKAMI – The Ultimate Guide 

Create Your Crypto Payment Link: No Code Required, Accept Payments Globally!

One-Click Integration of Crypto Payments into Your App

The Future is Universal: April 9, 2025

The Signals Update: March 26, 2025

The Pump Hound Update: March 12, 2025

Escape Exchange Risks: Why KryptoGO Self-Custody Wallet is the Ultimate Choice for Web3 Users

Handle Login and Group Chats Update: February 26, 2025

Evolution of Taiwan's VASP Regulation: From Declaration to Licensing

Beginner's Guide to Hyperliquid ft. KryptoGO App: Feb 12, 2025

Refining the Waves with Ocean v3: January 22, 2025

Biweekly Update: January 8th, 2025

The '25 Roadmap Preview: December 18, 2024

“The King of Tron” Update: December 4, 2024

Biweekly Update: November 20, 2024

The 'Pulse' Update: November 6, 2024

In-Depth Technical Analysis: Why Choose a Mature Crypto Wallet Service Instead of Building Your Own

Five Stages of Evolution for Crypto Wallets

Biweekly Update: October 23, 2024

Biweekly Update: October 09, 2024

Biweekly Update: September 25, 2024

Send Via Link campaign and "Gimme more wallets" Update :  September 11, 2024

The “Send Crypto via Link” Update: August 28, 2024

KryptoGO's Award-Winning Innovations at ZK Hack Montreal, ETHDenver, and ETHTaipei

Stake Your Stables! Biweekly update: August 14, 2024

The “Not Just A Wallet” Update: July 31, 2024

Biweekly Dev Update: July 17, 2024

Biweekly Dev Update: July 3, 2024

Biweekly Dev Update: June 5, 2024

Challenges and Solutions for Using Cryptocurrency in Business Operations

Biweekly Dev Update: May 22, 2024

Biweekly Dev Update: May 8th, 2024

Biweekly Dev Update: April 17th, 2024

Biweekly Dev Update: April 3rd, 2024

Biweekly Dev Update: March 20th, 2024

Making Sense of Decentralized Wallets: EOA and Smart Contract Explained

Biweekly Dev Update: March 6th, 2024

Centralized vs. Decentralized: The Ultimate Guide to Choosing the Right Crypto Wallet for Your Business

Navigating Compliance in Taiwan's Cryptocurrency Market: From Fraud Prevention to Enhanced Regulation

【Kind Reminder】Please be vigilant against scams. KryptoGO will never proactively ask you to make investment transactions.

Biweekly Dev Update: February 21th, 2024

Biweekly Dev Update: February 7th, 2024

Web3 Business Operations: Future Trend or Current Necessity?

Biweekly Dev Update: January 24th, 2024

Biweekly Dev Update: January 10th, 2024

Biweekly Dev Update: December 27th, 2023

Biweekly Dev Update: December 13th, 2023

Biweekly Dev Update, November 29th, 2023

Biweekly Dev Update, November 15, 2023

Biweekly Dev Update: November 1st, 2023

Biweekly Dev Update: October 19th, 2023

Biweekly Dev Update: Oct 4th, 2023

The Chatroom and Social Update: September 20th, 2023

Play-to-Earn vs. Blockchain Gaming: Rediscovering the Joy of Play

Product Launch Update: September 6th, 2023

KryptoGO Launches AI-Powered One-Stop Web3 Cloud Solution

Biweekly Update: August 23rd, 2023

The Keyless Wallet Update: August 9th, 2023

Biweekly Update: July 26th, 2023

Biweekly Update: July 12th, 2023

Biweekly Dev Update: June 7th, 2023

Unlock the Future: Passkey + DID + FIDO - Exploring the Next Generation of Digital Wallets and Identities

Biweekly Dev Update: May 24th, 2023

Biweekly Dev Update: May 10th, 2023

Biweekly Dev Update: April 26th, 2023

KryptoGO team wins three ETHGlobal Tokyo Hackathon Awards! Join hands with YGG Japan and IVC to lay out GamiFi industry

Biweekly Dev Update: April 12th, 2023

Help enterprises enter the Web3 world painlessly! What is WaaS?

Biweekly Dev Update: March 22th, 2023

How Much Does It Cost to Develop a Cryptocurrency Wallet on Blockchain?

How to Navigate the Metaverse: A Guide to 7 Different Types of Crypto Wallets

Virtual asset transaction service KYC, AML demand increased! KryptoGO Compliance work with Gaia Information  pioneered regulatory investigation engine

Biweekly Dev Update: March 8th, 2023

DeFi and KYC: Conflict or Coexistence?

Biweekly Dev Update: February 22nd, 2023

KryptoGO Wallet Updates: Supports Ronin chain, Personal Profile, Wallet Connect 2.0

Biweekly Dev Update: February 8th, 2023

Biweekly Dev Update: January 18th, 2023

Coinbase, the most compliant exchange, has been fined $100 million by the government and given a deadline to fix it.

Biweekly Dev Update: January 4th, 2023

Biweekly Dev Update: December 21, 2022

Biweekly Dev Update: December 7th, 2022

Biweekly Dev Update: November 23rd, 2022

Why can't you get your crypto assets back when the FTX exchange collapses? – Not Your Key, Not Your Coin

Biweekly Dev Update: November 9th, 2022

Biweekly Dev Update: October 26th, 2022

Biweekly Dev Update: October 12th, 2022

Biweekly Dev Update: September 28th, 2022

Things you should know about financial security in the Web3 era: How does token, private key, and wallet (account) work?

Collaboration for Web3 Game Wallets: YGG Japan, KryptoGO, and IVC Join Forces

Biweekly Dev Update: September 14th, 2022

Wanting to issue NFT but is complained about the difficult procedure? —Find out what the marketing pain points are from the “distribution process”

Biweekly Dev Update: August 31th, 2022

Crypto Wallets: Custodial vs. Non-Custodial Wallets

All You Need to Know About VASP FATF

Biweekly Dev Update: August 17th, 2022

The difference between KYC & AML?

Recommend Articles

Hot Articles

Hot Tags