# What is AML?

> AML (anti-money laundering) covers the checks and controls that stop a business being used to move illicit funds, including sanctions screening and source-of-funds review.

- Source: https://pipvalley.com/glossary/aml
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-03

In a prop firm, AML risk sits on both sides of the money flow: fees coming in, often by card or crypto, and performance rewards going out. Typical controls are sanctions and politically exposed person screening, monitoring for unusual purchase and payout patterns, and refusing payouts to third parties.

Whether a prop firm is a regulated or obliged entity under AML law varies by jurisdiction and structure. Many firms adopt AML controls anyway because their payment processors, crypto providers and banks require them.

A written AML policy, a named responsible person and records of checks are the minimum most counterparties will ask to see.

## Why it matters

Banks and processors judge you partly on your AML controls, and a weak answer can close an account. On the site, a short compliance statement and a clear rule that payouts go only to the verified account holder set expectations. Take local legal advice on what your obligations actually are.