Abstract:

New challenge to the AML/CFT and KYC was introduced by the technological developments and the emergence of cryptocurrencies. It became obvious that financial markets must become aware of currency based on distributed ledger technology. One of the key challenges for the financial system in tenns of Blockchain technology development are the typical financial procedures related to AML and KYC. The paper aims to present the system of distributed ledger technology, show the impact it might have on the development of the financial system, show the problem of verification of clients that trade cryptocurrencies, and the threats related to money laundering using Blockchain technology. The paper also describes the method to fight money laundering by adopting the Sm AML Directive by the European Union.