Anti-money laundering (AML) regulations help combat the laundering of illegal funds. They are a requirement for centralized cryptocurrency exchanges and help maintain the safety of customers and fight financial crimes. Due to the anonymous nature of cryptocurrency, its regulation relies heavily on monitoring customer behavior and identities.

AML regulations attempt to prevent the illegal laundering of illicit funds. Individual governments and multinational organizations like the FATF act against money laundering activities. Money laundering turns "dirty" money into clean money. This can be done by disguising the origins of the funds, mixing them with legitimate transactions, or investing them in legal assets.

The cryptocurrency sector is attractive for money laundering due to its privacy, difficulty in recovering funds, and its legislation that has not yet been fully developed. Large seizures of cryptocurrencies show that criminals regularly use them to launder large amounts. As technology has progressed, so have the methods of money laundering. As such, AML software typically flags behavior that can be considered suspicious. These signals and measures include large money transfers, repeated inflows of funds into an account, and cross-checking user information and checks on watchlists.