While related, KYC and AML serve different purposes: KYC (Know Your Customer):
Purpose: Identity verification and customer due diligence
Process: Collecting and verifying customer identity documents
Timing: Performed during customer onboarding
Focus: "Who is this person?" AML (Anti-Money Laundering):
Purpose: Detecting and preventing money laundering activities
Process: Ongoing transaction monitoring and suspicious activity reporting
Timing: Continuous monitoring throughout the customer relationship
Focus: "Are these transactions legitimate?" In blockchain context, KYC establishes who owns a wallet address, while AML monitors blockchain transactions for suspicious patterns like rapid transfers between multiple wallets or transactions involving known criminal addresses.
Rewriting in plainer words…
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