Anti-money laundering (AML) means the rules and measures meant to prevent money laundering and terrorist financing. Money laundering is the attempt to make illegally obtained money look legitimate, so it can be used without anyone noticing.
Which rules apply in Iceland?
In Iceland, the rules are set out in Act No. 140/2018 on measures against money laundering and terrorist financing (lög nr. 140/2018 um aðgerðir gegn peningaþvætti og fjármögnun hryðjuverka). It covers banks, crypto-asset service providers and others, which the act calls obliged entities. Among other things, they must:
- carry out know your customerKnow your customer (KYC)A legally required check in which a company confirms who its customer is and what the business relationship is for, including with ID. checks
- assess risk and monitor transactions
- report suspicious transactions to the Financial Intelligence Unit of the Icelandic police
- keep records of customers and transactions
The Central Bank of Iceland supervises how crypto-asset service providersCASP (crypto-asset service provider)A company licensed under MiCA to provide crypto-asset services, such as buying, selling, custody or transfers. follow the act. For crypto transfers, the travel ruleTravel ruleA rule requiring crypto-asset service providers to send information about the sender and recipient with every crypto transfer. also applies, which means information about the sender and recipient must go with the transfer.
Why does it matter to you?
AML rules are the reason a crypto service asks for your ID, and sometimes for information about where your money comes from. It can feel like a nuisance, but it makes life harder for criminals.
Iceland knows the cost of being seen as weak in this area. The international Financial Action Task Force (FATF) put Iceland on its list of jurisdictions under increased monitoring, the so-called grey list, in October 2019. Iceland was removed from the list in October 2020 after making improvements.
If a crypto service never asks any questions, treat that as a warning sign rather than a selling point.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.