AML laws are like bouncers at a nightclub, checking IDs to ensure no shady characters slip in. In the cryptocurrency space, governments require exchanges and financial service providers to identify customers, monitor transactions, and report suspicious activity.

Proponents say these rules help keep the financial system clean and deter criminal misuse of digital currencies. Critics argue that heavy-handed AML measures can infringe on privacy and place burdensome requirements on businesses and individuals. Nevertheless, compliance is a reality for most Bitcoin exchanges seeking to operate legally in many jurisdictions.