AML stands for Anti-Money Laundering, which is a set of procedures and legal regulations that aim to prevent and combat money laundering and terrorist financing in the country. AML regulations are used by crypto exchanges to monitor and mitigate the risk of money laundering and terrorist financing during and after the customer relationship or the transaction. AML regulations help crypto exchanges to detect and report any suspicious or unusual activity to the authorities, and to collect and distribute the taxes and fees related to the transaction. AML regulations also help crypto exchanges to comply with the crypto travel rule, which requires them to share customer information with other crypto exchanges or service providers involved in the same transaction.

KYC and AML regulations are both used by crypto exchanges, but at different times and for different reasons. KYC regulations are used before or at the beginning of the customer relationship or the transaction, while AML regulations are used during or after the customer relationship or the transaction. KYC regulations are used to identify and verify the customer, while AML regulations are used to monitor and report the customer’s activity.

CFT stands for Combating the Financing of Terrorism, which is a set of measures and regulations that aim to prevent and disrupt the flow of funds and resources to terrorist groups and individuals. CFT is part of the broader framework of Anti-Money Laundering (AML), which is the process of preventing and detecting the use of the financial system for illicit purposes, such as money laundering, tax evasion, fraud, and corruption.

CFT is also related to Countering the Proliferation of Weapons of Mass Destruction (CPWMD), which is the process of preventing and disrupting the transfer of funds and resources to entities involved in the development or acquisition of weapons of mass destruction and their delivery systems

Set up your KYC and AML policies and procedures, based on the relevant laws and regulations in your jurisdiction, as well as the best practices and standards in the crypto industry. You should define the scope, the criteria, and the frequency of your KYC and AML checks, as well as the roles and responsibilities of your staff and your service provider. You should also document and update your policies and procedures regularly, and communicate them clearly to your customers and stakeholders

GDPR stands for General Data Protection Regulation, which is a set of rules and principles that aim to protect the privacy and personal data of individuals in the European Union. GDPR applies to any organization or entity that collects, processes, or transfers personal data of EU citizens or residents, regardless of their location or industry.

GDPR protects the data and rights of customers who undergo KYC and AML checks, by requiring the entities that perform these checks to obtain the customer’s consent, to inform the customer about the purpose and scope of the data collection and processing, to ensure the accuracy and security of the data, to limit the retention and sharing of the data, and to respect the customer’s right to access, rectify, erase, or restrict the data.

GDPR also imposes obligations and responsibilities on the entities that perform KYC and AML checks, by requiring them to comply with the data protection principles, such as lawfulness, fairness, transparency, data minimization, purpose limitation, accuracy, storage limitation, integrity, and confidentiality.