If you buy or sell digital assets, you've probably noticed that exchanges and cryptocurrency exchange services ask you to go through verification and sometimes block suspicious transfers. All this is related to international AML, KYC, and KYT standards. But what are these abbreviations and why do users need them?

AML – rules against illegal transactions

AML (Anti-Money Laundering) is a set of measures to combat money laundering. The cryptocurrency market, due to its anonymity, has long been a convenient platform for attackers. Today, the situation has changed: most large exchanges and exchangers are required to monitor transactions and block suspicious addresses.

Example: if bitcoins were hacked or entered the exchange via the darknet, AML systems can freeze them. Thus, the platform reduces the risk of working with criminal funds and protects honest clients.

KYC – customer identity verification

KYC (Know Your Customer) is a standard identification procedure. Exchanges and exchangers use it to make sure that there is a real person behind the account.

What it looks like in practice:

• upload passport or ID card;

• proof of residence address;

• sometimes - a selfie with a document.

Without KYC, you may have restrictions on deposits and withdrawals. This is not a formality, but a requirement of regulators so that cryptocurrency services can filter out scammers and comply with the law.

KYT – Real-Time Transaction Analysis

KYT (Know Your Transaction) is a logical addition to KYC. While KYC verifies identity, KYT tracks the transfers themselves.

The system analyses:

• where did the coins come from;

• what addresses is the sender's or recipient's wallet associated with;

• does the transaction have any suspicious features?

Thanks to KYT, large exchanges and cryptocurrency exchange services can block dubious transactions in time and prevent dirty funds from entering their system.

Why These Standards Are Important for the Cryptocurrency Market

AML, KYC and KYT are needed not only by governments, but also by ordinary users. Here's why:

• Protection of your funds. Reduces the risk of dealing with fraudsters and stolen assets.

• Transparency. Platforms that follow standards operate legally and won't disappear with your money.

• Reduced blocking. KYC and KYT clean transactions simplify withdrawals and reduce the likelihood of account freezing.

Cryptocurrency regulation will become more stringent. It is already almost impossible to use exchanges without verification, and transaction analysis algorithms are becoming more accurate. This is a normal process: the market is maturing and trying to protect users from scammers.

AML, KYC and KYT are international standards that help make the cryptocurrency market safer. If you work with exchanges or use cryptocurrency exchange services, be prepared for verification and transaction checks. This is not a restriction of freedom, but an element of your own protection.

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