AML Policy
LINK Exchange applies a risk-based approach to anti-money-laundering, sanctions and transaction-risk controls. The purpose of these controls is to reduce the use of the service for stolen funds, fraud, sanctions evasion, money laundering and other prohibited activity while keeping the normal exchange flow focused on the transaction being created.
This policy describes the general framework. Specific checks can depend on the source of funds, blockchain activity, route, jurisdiction, service provider and risk signals associated with an order.
What AML Means in Cryptocurrency
AML stands for anti-money laundering. In cryptocurrency services, AML controls can include blockchain transaction screening, sanctions checks, risk scoring, review of source and destination activity, and additional information requests when a transaction presents elevated risk.
Blockchain transparency can provide transaction history that does not exist in the same form for cash. At the same time, wallet addresses do not automatically identify the person controlling them, so services may combine onchain signals with other risk controls.
How AML Checks Can Work
A transaction can be evaluated before or during processing. Depending on the service configuration, automated tools and manual review may consider the origin of funds, exposure to identified illicit activity, sanctions indicators, unusual transaction patterns or other risk factors.
A low-risk order can proceed through the normal flow. An order with material risk indicators may be delayed, rejected, held for review or require additional information before a final decision is made.
KYC and AML Are Related but Not Identical
KYC means "know your customer" and generally refers to identifying or verifying a customer. AML is broader: it covers the policies and controls used to detect and manage money-laundering and related financial-crime risks.
A KYC check can therefore be one part of an AML program. The fact that an exchange order does not begin with mandatory account registration does not guarantee that identity or source-of-funds information can never be requested.
Transaction Risk Signals
Risk indicators can include, but are not limited to:
- direct or indirect exposure to addresses identified with theft, fraud or other illicit activity;
- sanctions-related exposure;
- attempts to use the service in a way inconsistent with its normal exchange purpose;
- transaction patterns designed to obscure the source or destination of funds;
- material inconsistencies between information provided and observable transaction data;
- use of compromised or stolen assets;
- activity that triggers a service provider's legal or risk obligations.
A single technical signal does not always prove wrongdoing. Risk controls can consider context, severity and the reliability of available information.
What Is an AML Red Flag in Crypto?
An AML red flag is a fact or pattern that warrants closer review because it can be associated with financial crime or prohibited activity. Examples can include known illicit-source exposure, sanctions indicators, attempts to bypass controls or transaction behavior inconsistent with the stated purpose of the exchange.
Red flags are review triggers, not automatic public accusations. A risk-based system can distinguish between low-confidence signals and evidence that requires a stronger response.
When Additional Information May Be Requested
If an order cannot be processed under the normal risk threshold, the service or a relevant provider may request information needed to understand the transaction. The request can relate to identity, source of funds, purpose of the transfer, ownership of a wallet or other facts relevant to the detected risk.
Any request should be limited to the information reasonably necessary for the review and handled through the service's official support or verification process.
Possible Outcomes of an AML Review
Depending on the circumstances and what is technically and legally possible, an order may:
- continue after review;
- require additional information;
- be delayed while a risk signal is investigated;
- be rejected before processing;
- be refunded to an appropriate address;
- be restricted or handled according to applicable legal obligations.
Blockchain transactions can create practical limits on reversibility. The exact outcome therefore depends on the status of the order and the underlying networks.
No Account Does Not Mean No Compliance
A crypto-to-crypto order can be created without maintaining a traditional trading profile and still be subject to AML, sanctions or transaction-risk controls. Account structure and compliance obligations are separate questions.
Users should not interpret a streamlined order flow as a promise that every transaction will proceed without review under all circumstances.
User Responsibilities
Users should use assets they are legally entitled to control and provide accurate transaction information. The service must not be used to conceal stolen funds, bypass sanctions, facilitate fraud or evade lawful restrictions.
If an order is placed from a third-party wallet or service, the user is responsible for understanding any requirements that provider applies to the transfer.
Privacy and Compliance Data
Information used in a compliance review should be handled according to the Privacy Policy and applicable operational requirements. Public blockchain data can also be reviewed independently of information submitted directly by a user.
Support and compliance questions can be submitted through the Contacts page without sharing private keys or seed phrases.
FAQ
What is AML in cryptocurrency?
AML in cryptocurrency is the set of controls used to identify and manage money-laundering, sanctions and related financial-crime risks in crypto transactions. It can include blockchain screening, risk scoring and manual review.
How does AML work on a crypto exchange?
A service can evaluate an order using onchain transaction history, sanctions data, risk indicators and information associated with the transaction. Low-risk orders may proceed normally, while higher-risk cases can require review or additional information.
What is a KYC AML check?
A KYC AML check combines customer-identification measures with broader anti-money-laundering controls. KYC can help establish who a customer is, while AML assesses transaction and financial-crime risk more broadly.
What is a red flag during KYC verification?
A red flag can be an inconsistency, suspicious document issue, sanctions match or transaction pattern that requires closer review. A red flag is a reason to investigate further rather than a standalone conclusion that a user has committed wrongdoing.
What are common AML red flags for cryptocurrency?
Examples include exposure to known stolen funds, sanctions-related addresses, fraud-linked activity and attempts to deliberately bypass transaction controls. The significance of a signal depends on its source, confidence and surrounding transaction context.
Does LINK Exchange always require KYC?
The normal exchange flow does not necessarily begin with conventional account-based KYC. Additional verification can still be requested when a transaction, provider or applicable obligation requires it.
Can an exchange be stopped for AML reasons?
Yes. A transaction can be delayed, rejected or otherwise restricted when material compliance or risk concerns are identified. The available action depends on the order stage, blockchain status and applicable requirements.