The language of digital asset compliance, decoded plainly.

Public information about negative coverage of a person or entity. Compliance teams scan it during onboarding and continuously to surface risk that doesn't show up on a sanctions list.

Anti-money laundering. The set of laws, rules, and procedures designed to stop criminals from disguising illegally obtained funds as legitimate income.

Linking an on-chain address or cluster of addresses to a real-world entity, like an exchange, mixer, scam, or sanctioned party. The foundation of every risk score.

The natural person who ultimately owns or controls a legal entity. Required disclosure under most KYC and corporate transparency rules.

A protocol that moves value between two blockchains. A frequent vector for laundering, since it can break attribution if it isn't traced across both sides.

Customer due diligence. The baseline identity, beneficial owner, and risk-rating checks every regulated business runs at onboarding. EDD is the higher-intensity version for higher-risk customers.

A group of on-chain addresses tied to the same controller, identified through heuristics like co-spend, change patterns, or behavioral fingerprints.

The other side of a transaction. In screening, it's the address or entity your customer is sending to or receiving from.

A regulated entity that holds digital assets on behalf of clients. Most exchanges and qualified custody services fall in this category.

Decentralized finance. Financial protocols that run on smart contracts without a centralized operator. Lending, swapping, and yield without intermediaries.

Enhanced due diligence. Deeper checks applied to higher-risk customers, including source of funds, source of wealth, and ongoing monitoring.

The Financial Action Task Force. The intergovernmental body that sets global AML and counter-terrorism financing standards. The Travel Rule comes from FATF Recommendation 16.

The U.S. Treasury's Financial Crimes Enforcement Network. Receives suspicious activity reports and enforces the Bank Secrecy Act.

The on-chain capability that lets a token issuer immobilize a specific address's holdings, usually via a freeze function in the token contract. Required by the GENIUS Act and MiCA for compliant stablecoins. Useless without visibility into where the token actually moved.

The Guiding and Establishing National Innovation for US Stablecoins Act. Creates a federal licensing framework for payment stablecoin issuers in the U.S. Requires 1:1 reserve backing, monthly attestations, full AML programs under the Bank Secrecy Act, and on-chain freeze capability at OFAC-designated addresses.

A rule that infers structure from on-chain data. Used to cluster addresses, label entities, and detect mixer or peel-chain patterns.

InterVASP Messaging Standard 101. The data format virtual asset service providers use to exchange originator and beneficiary information when satisfying the Travel Rule. The recognized transmission standard across most jurisdictions.

Know your business. KYC for legal entities. Verifies the business itself plus its beneficial owners and directors.

Know your customer. Verifying who a customer is before letting them transact. Identity, document checks, sanctions and PEP screening.

A North Korean state-sponsored advanced persistent threat group attributed to multi-billion-dollar crypto thefts including the Ronin, Atomic Wallet, and Harmony bridge exploits. OFAC has sanctioned addresses tied to Lazarus and continues to add new ones as funds move.

The EU's Markets in Crypto-Assets regulation. Sets licensing and conduct rules for crypto-asset service providers across the bloc.

A service that pools and re-emits funds from many sources to break the on-chain trail. Often sanctioned, like Tornado Cash.

Money services business. A FinCEN classification covering money transmitters, including most U.S. crypto exchanges.

The U.S. Treasury's Office of Foreign Assets Control. Maintains the SDN list of sanctioned individuals, entities, and addresses.

Politically exposed person. A current or former public official. Higher risk under most AML programs because of corruption exposure.

The verifiable history of an asset. On-chain, the trail of transactions from origin to current holder.

A composite measure of how risky an address, transaction, or counterparty is. Should be explainable, not a black box.

Checking customers, counterparties, and addresses against government sanctions lists like OFAC SDN, EU consolidated, and UN.

Suspicious activity report. Filed with FinCEN when activity meets U.S. reporting thresholds. Outside the U.S. the equivalent is an STR, suspicious transaction report.

Where the money in a specific transaction came from. Distinct from source of wealth.

How a customer's overall wealth was built up over time. A higher-bar question than source of funds, asked under enhanced due diligence.

Federal Reserve guidance on model risk management. Requires banks to inventory, independently validate, and periodically review every model used in risk decisions, including AI and algorithmic compliance tools. Vendors must provide documentation covering training data, methodology, expected error rates, and drift detection.

A token pegged to a reference asset, usually the U.S. dollar. USDC, USDT, and DAI are the most circulated.

Continuous review of customer activity against rules and risk models to surface suspicious behavior after onboarding.

The requirement that virtual asset service providers exchange originator and beneficiary information with each other on transfers above a threshold.

Virtual asset service provider. The FATF term for crypto exchanges, custodians, brokers, and wallet providers.