Learn in the textbookFinTech, Digital Currencies, and Identity Verification / Anti-Money-Laundering Measures
DefinitionAML (Anti-Money Laundering) refers to measures that prevent money laundering (マネーロンダリング), which hides the origin of criminally obtained funds so that they look like legitimate income.
ExplanationFinancial institutions and others take steps such as verifying identity at the time of a transaction, monitoring transactions continuously, and reporting suspicious ones to the authorities. Money laundering often passes funds through many accounts and transfers to blur their trail, so it is necessary to look at the whole series of money movements, not just a single transaction.
AnalogyIt is like a guard who watches for, and stops, anyone running dirty banknotes through one washing machine after another until no one can tell where the dirt came from.
Memory hookLaundering means washing. Put Anti (against) in front of washing money, and you get the term.