What is Anti-Money Laundering (AML)?
Synonyms:
| Chinese Terminology | English Terminolog | Description |
|---|---|---|
| 反洗钱 | Anti-Money Laundering（AML） | The most commonly used and formal term in legal and compliance contexts. |
| 反资金清洗 | Anti-Money Laundering | A less common alternative translation with the same meaning. |
| 洗钱防制 | Anti-Money Laundering | A term widely used in Taiwan and Hong Kong, especially in the finance and gambling industries. |
AML stands for Anti-Money Laundering in English, commonly translated in Chinese as “反洗钱”.
It is a set of financial compliance measures and regulatory systems designed to prevent illicit funds from being “cleaned” through legitimate channels. AML frameworks are widely applied in high-risk financial sectors such as banking, securities, cryptocurrency, and gambling.
Core objectives of Anti-Money Laundering:
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Preventing funds generated from illegal activities such as drug trafficking, fraud, corruption, human trafficking, and terrorism from entering the financial system
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Combating cross-border money laundering and international financial crime networks
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Enhancing the transparency and stability of the global financial system
Origin and History of AML
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1989: The G7 established the Financial Action Task Force (FATF) in Paris to create the first set of international AML standards.
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Post-2001: After the 9/11 attacks, FATF expanded its mandate to include Countering the Financing of Terrorism (CFT).
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Since the 2000s: With the rise of online gambling, electronic payments, and virtual assets, AML regulations have expanded into these emerging sectors.
What Is Money Laundering? A Summary of the Three Stages
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Placement: Introducing illicit cash into legitimate channels (e.g., gambling platforms, banks, underground money exchanges)
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Layering: Obscuring the origin of funds through multiple transactions, cross-border transfers, and cryptocurrency mixing
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Integration: Converting laundered money into legal asset forms such as investments, real estate, or business funds
Key Institutions in AML Enforcement
International Organization
| Name | Role |
|---|---|
| FATF (Financial Action Task Force) | The world's leading AML policy-making body; issues 40 AML Recommendations, monitors high-risk countries, and enforces the graylist/blacklist system. |
| Egmont Group | A network of over 160 Financial Intelligence Units (FIUs) around the world, facilitating global AML information sharing. |
| World Bank / IMF | Assist developing countries in drafting AML regulations and providing technical support. |
Government Agencies (FIUs) by Country
| Country | Primary AML Authority |
|---|---|
| United States | FinCEN (Financial Crimes Enforcement Network) |
| United Kingdom | UKFIU (part of the National Crime Agency) |
| Malta | FIAU (Financial Intelligence Analysis Unit) + MGA (for the gambling sector) |
| Canada | FINTRAC (Financial Transactions and Reports Analysis Centre) |
| Singapore | MAS (Monetary Authority of Singapore) + CAD (Commercial Affairs Department) |
| European Union | EBA (European Banking Authority), responsible for unified AML policy-making |
Specific AML Measures
Legal entities (e.g., gambling platforms, banks, exchanges) are required to implement the following AML procedures:
| Category | Description |
|---|---|
| KYC (Know Your Customer) | Collect user identity information, address, and payment methods to ensure authenticity and legality |
| Suspicious Transaction Report (STR) | Report any abnormal or suspicious transaction to the relevant authority |
| Sanctions List Screening | Cross-check against sanctions lists (e.g., FATF, OFAC) to avoid transactions with high-risk individuals or entities |
| Transaction Monitoring System | Use risk-control algorithms to detect fund irregularities and suspicious patterns |
| AML Staff Training | Employees must undergo regular AML compliance and legal education |
| Third-Party Audit / Review | Platforms must be reviewed by independent auditors to assess regulatory compliance and system integrity (e.g., GLI, iTech Labs) |
Application of AML in the Gambling Industry
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All licensed gambling platforms (e.g., those holding MGA, UKGC, CGA licenses) are required to establish comprehensive AML procedures.
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Players must complete KYC during registration or their first withdrawal.
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When players exhibit suspicious behavior such as high-stakes betting or frequent fund transfers, the platform must file a STR (Suspicious Transaction Report).
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Platforms must submit an annual AML compliance report and are subject to random audits by regulatory authorities.
Risks of Non-Compliance with AML
| Type of Consequence | Description |
|---|---|
| Legal Liability | The platform may face fines, license suspension, or criminal prosecution of key personnel |
| Business Impact | Payment providers (e.g., Visa, Mastercard, Astropay) and suppliers may terminate partnerships |
| Brand Trust Breakdown | Frozen player funds and withdrawal failures can severely damage brand reputation |
| International Pressure | Countries listed on the FATF graylist or blacklist may face global financial sanctions and investment restrictions |
How is AML Different from KYC?
| Item | AML | KYC |
|---|---|---|
| Full Term | Anti-Money Laundering | Know Your Customer |
| Nature | Macro-level framework (strategy + systems) | Micro-level execution tool (identity verification) |
| Primary Objective | Prevent financial crimes and terrorist financing | Verify user identity and legitimacy |
| Level of Application | Platform, national, and regulatory authorities | Internal platform processes / user-level verification |
| Are They Related? | KYC is a component of AML |
Summary
With increasing global compliance in the financial and gambling industries, AML is no longer just the responsibility of major banks—it has become a “basic rule of the game” for any business involving fund flows and user accounts. For gambling platforms, strict implementation of AML often directly determines whether they can obtain licenses, operate stably, and earn the trust of users and partners.