As a newcomer to the world of blockchain digital assets, you might have come across the terms KYC and AML. Grasping these concepts is crucial for anyone embarking on a journey into the blockchain space.

KYC is a procedure that companies, including digital asset exchanges, use to verify the identity of their users. This involves collecting and verifying personal ID, proof of residence, photo verification, etc. The KYC process is crucial for preventing identity theft, money laundering, and other types of fraud.

AML refers to a set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income. Digital asset exchanges often implement AML procedures, such as monitoring and reporting suspicious activities, to comply with regulations and combat money laundering.
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In conclusion, KYC and AML are essential procedures for preventing illegal activities and ensuring the safety of users in the blockchain space. While centralized exchanges (CEXs) usually require KYC and AML procedures, decentralized ones (DEXs) and DeFi platforms often do not. However, as the blockchain space evolves and regulations tighten, it is possible that KYC and AML procedures will become more common across all platforms.