AML verification: why it’s necessary and how to protect your crypto assets

What is AML verification and why is crypto cleanliness important?

Most cryptocurrencies do not provide complete anonymity, but still allow users to make large transfers without traditional bank identity checks. This feature makes digital assets attractive to financial criminals who steal and launder funds.

Stablecoins, which serve as an alternative to fiat currencies such as the US dollar, are especially popular in fraudulent schemes. According to Chainalysis, in 2024, stablecoins accounted for about 63% of all illegal crypto transactions, and the total volume of such transactions exceeded $40 billion.

To prevent suspicious transactions such as money laundering and interrupt illegal financial flows, regulators enforce rules for legal crypto service providers, including exchanges and crypto exchangers. AML verification plays a central role in these regulations, enabling real-time tracking of suspicious asset movements.

What is AML verification and how does it work?

AML verification is a set of procedures conducted to detect suspicious transactions involving crypto assets obtained illegally or, in other words, "dirty" cryptocurrencies. Modern AML verification not only identifies contact with illegal coins but also determines the level of risk and the likely source of contamination. "Dirty" digital assets include cryptocurrencies associated with:

Money laundering
Terrorism financing
Scams (fraud schemes aimed at stealing crypto assets from users)
Theft of funds, including as a result of exchange hacks or decentralized protocol breaches
Other illegal activities

AML verification is one of the key tools in the fight against money laundering and is directly linked to regulatory initiatives:

KYC (Know Your Customer) — a procedure for verifying a client's identity, conducted to reduce financial crime risks. Users of crypto exchanges and exchangers are familiar with this procedure, as they must provide personal information when creating an account.
AML (Anti-Money Laundering) — a set of measures aimed at combating money laundering, including monitoring crypto transactions and collecting information about individuals' financial activities. The term AML was introduced by the FATF* back in 1989, when the first measures to counter the legalization of criminal proceeds were developed.

* FATF (Financial Action Task Force) — an intergovernmental organization responsible for developing global standards to combat money laundering, terrorism financing, and the proliferation of weapons of mass destruction.

The primary purpose of AML verification is to block the movement and legalization of illegal crypto assets. With AML verification, exchanges and exchangers can proactively identify high-risk addresses and stop dirty funds from entering their infrastructure.

For example, following sanctions imposed by the Office of Foreign Assets Control (OFAC) against Tornado Cash*, the number of illegal transactions decreased by 53% in 2024. After using such services, assets are marked as "dirty", which is why these tools are recommended to be avoided if you want to stay compliant.

* Tornado Cash is a decentralized crypto mixer that allows users to hide the link between the sender and recipient by mixing transactions in shared pools. Due to its high level of privacy, the service became popular, but was also used by cybercriminals and hacker groups, which eventually led to its blocking.

The Financial Crimes Enforcement Network (FinCEN) has been actively involved with the crypto market since 2021, requiring exchanges to comply with AML rules. For this reason, almost all legal trading platforms require identity verification, and when suspicious transactions are detected, they may block them — or even user accounts.

Why is AML verification so important and how to avoid "dirty assets"?

Data from the analytical service Chainalysis shows that the volume of cryptocurrencies used for money laundering continues to grow despite the overall decline in illegal activity in the crypto sector.

For users, this means the risk of receiving "dirty coins" is increasing. "Dirty coins" can end up in a wallet accidentally — especially when using unreliable or illegal services or interacting with suspicious users. This is why regular AML verification of received coins has become a basic cybersecurity measure for anyone using cryptocurrency.

If "dirty coins" appear in a user's wallet, an AML verification will mark the address as "contaminated". Using a contaminated address may lead to:

A crypto exchange refusing deposits or withdrawals, and sometimes even freezing the account
The wallet address is being added to a blacklist, making it impossible to buy or sell cryptocurrency through legal providers
The user risks loss of access to their assets, for example, if they end up on OFAC sanctions lists
The risk of becoming involved in an investigation and potentially facing liability
Financial losses caused by asset freezes, which can take months to resolve or may never be reversed if proof of legal origin cannot be provided

There are several ways to minimize the risk of receiving "dirty cryptocurrency":

Use available services for AML verification of addresses and cryptocurrencies, such as the BestChange analyzer
Create separate crypto wallets to avoid having your main address entirely blocked
Use P2P platforms with caution, especially those that allow operations without KYC; a safer choice is verified exchangers listed on BestChange
Before a transaction with another person, perform AML verification of their address — BestChange provides this service

How and where to perform AML verification?

AML verification is available through specialized platforms such as Chainalysis, Crystal, CoinKYT, and GetBlock. However, these services are aggregators that offer comprehensive monitoring and transaction analysis tools mainly to corporate clients. Ordinary users typically cannot access them due to high pricing and enterprise-oriented service models.

For private users, AML verification is available through specialized services that leverage data from major analytical aggregators. One such service is the BestChange transaction analyzer. As a result, AML verification has become part of basic digital hygiene and is now used not only by companies but also by everyday cryptocurrency holders.

To perform AML verification, a user simply needs to enter the wallet address, select a crypto asset and analyzer, and provide an email to receive the results.

The cost of AML verification depends on the chosen analyzer and ranges from $0.50 to $1.00. On the BestChange website, users can access analyzers such as GetBlock, CoinKYT, and Shard. Checking an address through Chainalysis OFAC Sanctions is free.