What is the Best Crypto AML and Compliance Solution in 2025?

Editor's note: This post was updated on November 21, 2025

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Whether you’re a regulated exchange, a global bank, or a national financial intelligence unit (FIU), the challenges you’re up against — and the compliance requirements you need to meet — have undoubtedly become more complex as the digital asset market has evolved:

• Multi-hop, cross-chain laundering across many intermediary wallets is now the norm — not the exception
• Sanctions evasion tactics are more advanced and often involve seemingly legitimate payment service providers, OTC broker services, and other professional enablers 
• Regulators expect proactive controls — and clear documentation of risk-based decisions
• False positives are no longer just inefficient — they’re a liability

TRM Labs delivers the most complete and proactive crypto AML solution for compliance teams — combining behavioral risk detection, unmatched data quality, seamless automatic cross-chain tracing, and fully explainable risk scoring within a unified end-to-end platform. TRM is used by institutions and regulators worldwide — empowering teams to detect, investigate, and prevent crypto-related risk with greater speed, accuracy, and confidence than any other provider.

To protect their organizations — and the customers they serve — compliance professionals at financial institutions need advanced tools that can uncover hidden risk to help them make fast, defensible, and confident decisions about the Virtual asset service providers (VASPs) and other crypto entities they and their customers engage with. And they need tools that combine on- and off-chain intelligence to ensure they meet anti-money laundering (AML) and other regulatory requirements.

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What does anti-money laundering (AML) mean in the context of crypto?

AML refers to the set of laws, regulatory expectations, controls, and processes that financial institutions use to detect and prevent the movement of criminal funds. It’s a compliance requirement that has long been in place in traditional finance (TradFi). 

But money laundering in crypto presents additional data, challenges, and complexities that differ from TradFi. For instance, laundering often involves hundreds of rapid transfers across wallets, assets, and blockchains — all designed to obscure the origin of funds.

In short, while the goal is the same, the tools, techniques, and risks are more complex.

How are crypto laundering techniques designed to evade detection?

Today’s crypto laundering tactics frequently involve:

• Cross-chain bridges: Moving funds across blockchains to break traceability
• Mixers and privacy coins: Obfuscating the transaction trail
• Layering: Splitting funds into small amounts and distributing across dozens or hundreds of wallets
• Decentralized exchanges (DEXs) and swap protocols: Using decentralized services that don’t require Know Your Customer (KYC)
• Cashing out and laundering through low-KYC services: Exiting to fiat and trading via unregulated or permissive platforms
  

These methods are often used in combination — sometimes within a few minutes — to frustrate investigators and obscure origin.

For example, in November 2021, decentralized finance protocol bZx announced that one of their developers was the victim of a phishing attack, enabling the attacker to gain control of the developer’s wallet and bZx’s Binance Smart Chain and Polygon deployment protocol. The attacker drained approximately USD 55 million from wallets on the Binance Smart Chain, Polygon, and Avalanche blockchains before bZx was able to take action. After gaining control of the funds on those chains, the attacker used at least four cross-chain bridges to move the stolen cryptocurrency to the Ethereum blockchain.

Where do traditional monitoring tools fall short?

Legacy AML systems were built to detect large fiat transfers, unusual login behavior, or international wire patterns. They were not designed to:

• Interpret on-chain transaction flows: Traditional systems don’t natively understand how value moves across public blockchains. They can’t follow wallet-to-wallet transfers, smart contract interactions, or the rapid movement of assets between different blockchains — which means critical patterns often go undetected.
• Detect real-time obfuscation patterns across many seemingly unrelated transactions: Sophisticated actors often break up large amounts into hundreds of small transfers, routed through multiple wallets and services. Legacy tools miss these patterns because they don’t analyze transaction behavior holistically or fast enough to surface risks as they emerge.
• Connect wallets to known scam clusters: Without access to up-to-date attribution data or clustering intelligence, traditional tools can’t detect whether a wallet is part of a larger fraud network. That means they often miss coordinated scams — like pig butchering or phishing rings — that rely on large groups of interlinked addresses.
• Detect the ever growing list of VASPs: New VASPs, including exchanges, mixers, and cross-chain services, emerge daily. Legacy systems rely on static, centralized lists — which means they frequently miss exposure to newly identified or unregistered platforms operating in high-risk jurisdictions.

As a result, laundering activity in crypto can go unflagged — or get buried in false positives. Conversely, crypto AML platforms like TRM enable compliance teams to detect money laundering by:

• Scoring wallets based on both exposure and behavior
• Flagging behavioral patterns that are not normal and expected activity
• Surfacing suspicious behavior involving mixers, privacy tools, or high-risk facilitators like OTC desks and payment services
• Enabling tracing across chains to reconstruct full laundering paths
• Providing detailed case histories to document and share findings
• Providing full transparency into attribution sources and confidence
  

This makes it possible to detect crypto laundering as it’s happening — not months after the fact.

What are the core areas of focus for crypto AML compliance teams?

AML in the digital asset space focuses on identifying and mitigating risks such as:

• Use of illicit funds: Identifying wallets that receive or move funds from hacks, scams, darknet markets, or sanctioned entities
• Obfuscation attempts: Detecting laundering behavior like layering, mixing, rapid cross-chain transfers, or breaking down large transfers into smaller pieces to avoid risk thresholds or reporting requirements
• Synthetic identities: Spotting patterns that indicate a user is trying to bypass KYC obligations
• Interaction with high-risk services: Monitoring use of VASPs, wallets, or platforms known to have poor AML controls

AML in crypto isn’t just about following the money — it’s about understanding the behavior behind transactions, even when bad actors try to hide it.

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What types of organizations need crypto AML and compliance software?

Crypto AML and compliance tools aren’t just for crypto exchanges. Today, a wide range of institutions rely on these solutions to detect risk, maintain regulatory compliance, and meet their legal obligations.

Here’s who’s using crypto AML and compliance software — and why it matters:

• Crypto-native companies (VASPs)
• Banks and financial institutions
• Corporations
• Regulators and supervisory authorities
• Law enforcement and intelligence agencies

Crypto-native companies (VASPs)

Crypto businesses like VASPs are subject to the same AML laws as traditional financial institutions. Tools like TRM help them proactively screen wallets, monitor transactions, and file suspicious activity reports (SARs).

Examples:

• Centralized exchanges
• Wallet providers
• On- and off-ramps
• Stablecoin issuers
• DeFi frontends (in jurisdictions where compliance is required)

Banks and financial institutions

As more traditional banks and financial institutions engage with crypto — through custody, trading, payments, or banking crypto firms — they need to identify illicit exposure, monitor counterparties, and ensure AML compliance.

Examples:

• Commercial and investment banks
• Custodians and prime brokers
• Fintechs offering crypto services
• Cross-border payment processors
• Asset managers investing in crypto

Corporations

Many non-financial services corporations are adopting digital assets — like stablecoins — to streamline payments to suppliers and customers. They will have similar AML compliance responsibilities and need to conduct due diligence on stablecoin issuers and monitor counterparties.

Regulators and supervisory authorities

Regulators use compliance tools to monitor VASP activity, assess institutional risk management, and enforce reporting requirements.

Examples:

• Financial intelligence units (FIUs)
• Central banks and securities regulators
• Tax authorities and financial services commissions

Law enforcement and intelligence agencies

Investigators within law enforcement agencies use tools like TRM to trace illicit crypto flows, attribute wallets to known actors, and build prosecutable cases.

Examples:

• National police agencies and financial crime units
• Cybercrime and counterterrorism divisions
• Cross-border task forces

In many cases, a single suspicious transaction can come across each of these desks: from detection by a VASP, to alerting regulators, to triggering a full-scale investigation with law enforcement teams.

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Why is crypto AML software critical for compliance teams?

Unlike traditional finance, where suspicious transactions can take hours or days to settle, crypto transactions are irreversible and often completed in seconds. In short: once the funds are gone, they’re gone.

Crypto AML software is essential because it gives compliance teams the speed, visibility, and precision they need to detect and respond to illicit activity in real time — across blockchains, assets, and typologies. Traditional tools can’t keep up with the pace of crypto transactions or the complexity of laundering tactics, which increasingly involve AI, cross-chain movement, and privacy tools. Without crypto-native solutions like TRM, compliance teams risk missing key threats — or becoming overwhelmed by false positives.

Here are a few reasons why dedicated crypto AML and compliance software is essential.

1. Illicit finance is real — and evolving

While the majority of crypto transactions today are licit, bad actors continue to turn to crypto as a means of rapid value transfer. In TRM’s 2025 Crypto Crime Report, we estimated that illicit crypto volume reached USD 34.8 billion for 2023 — a figure that was later revised upwards to USD 58.7 billion as new attribution became available. Crypto AML and blockchain intelligence software, like that provided by TRM Labs, is critical in detecting and disrupting criminal financial activity before it moves off-chain. 

2. Regulators expect proactive controls

AML compliance is no longer just about checking a box. Regulators now expect firms to screen wallets in real time, monitor transactions for red flags, request wallet address information when there is a crypto nexus, and document how risks are managed. Jurisdictions around the world — from the US to the EU to Singapore — are actively enforcing compliance in the crypto space. Failure to meet expectations can result in fines, license loss, or independent monitorship.

3. Crypto laundering techniques are highly dynamic

Illicit actors routinely exploit cross-chain bridges, decentralized exchanges, behavioral patterns, and privacy coins to obscure fund flows. Many of these tactics are invisible to legacy monitoring systems. Plus, as more criminal networks turn to AI to scale their attacks — and digital assets to rapidly move their funds — full visibility into on-chain activity will be critical in detecting and preventing financial crime.

4. False positives can paralyze teams

On the other side of the coin, a system that flags everything as risky isn’t helpful — it’s a liability for compliance teams that can create unmanageable backlogs. Crypto AML tools must go beyond exposure-based heuristics to surface real risk while reducing noise.

5. You need to be able to prove your decisions

Whether they’re facing a regulator, a board audit, or a courtroom, compliance teams must be able to show how and why a risk decision was made — ideally with a clear, timestamped record. Crypto AML tools like TRM Labs provide users with the paper trail they need.

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What is the role of crypto AML software in blockchain investigations?

Modern crypto AML software plays a dual role in compliance programs: it’s both the first line of defense and the central investigative engine once a potential issue is detected. What begins as an automated alert — flagging exposure to a high-risk wallet, exchange, or typology — can develop into a full-scale investigation into customer source of funds, fraud, sanctions evasion, or money laundering.

For compliance professionals and investigators using TRM, when a suspicious transaction is detected, the same AML platform used to screen wallets and monitor transactions becomes the primary tool investigators use to understand what happened — and who was involved.

Purpose-built crypto AML software supports teams through every stage of an investigation:

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TRM is frequently used in investigations and reviews that begin with a transaction alert and end in asset recovery, regulatory action, or criminal prosecution — particularly in cases involving cross-border fraud, ransomware, or pig butchering schemes. Without the ability to detect, trace, and explain risk in crypto transactions, most investigations would stall before they start.

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What sets TRM Labs apart from other crypto AML and compliance software providers?

Many vendors claim full visibility into risk. Few deliver on the core capabilities crypto compliance teams actually need to take action on that risk. Here’s what sets TRM apart.

1. Behavioral risk detection, not just exposure scores

Most tools in the market rely heavily on exposure-based risk scoring — flagging addresses that have interacted with known illicit entities. The problem: by the time exposure is detected, funds have often already moved multiple hops downstream.

TRM is the only platform combining exposure with behavioral risk signals — including indicators like structuring, obfuscation patterns, and transaction velocity — to proactively detect high-risk activity even before attribution is possible. These behavioral indicators help compliance teams move from reactive to preventive controls — especially in cross-chain and fast-moving typologies.

2. Standardized and comprehensive blockchain coverage

Blockchain coverage varies from vendor to vendor — and it can even vary across chains within a single vendor. TRM has standardized blockchain support, enabling us to rapidly add new chains that drive customer outcomes. This ensures every chain we launch supports customer outcomes and includes consistent functionality, so you don’t have to guess what’s supported from chain to chain.

Our default support provides all the insights and functionality that compliance teams, regulators, investigators, and analysts need to assess and trace risky transactions, including:

• Full capabilities in TRM Wallet Screening and TRM Transaction Monitoring
• Core entity and address-level insights in TRM Forensics
• Automatic cross-chain tracing
• Ownership and counterparty exposure for all risk categories
• Indirect exposure for severe and high-risk categories
• Real-time transaction data freshness

3. Unmatched data quality

TRM is the only vendor that:

• Adds new sanctions attribution into our platform within hours after a new designation
• Has dedicated analysts for each threat category, collecting ground-truth evidence on terrorist financing, DPRK, child sexual abuse material (CSAM), transnational organized crime networks, and Chinese fentanyl precursor manufacturers
• Provides access to source information and confidence levels for every piece of attribution in our platform

A recent White House Report on Digital Assets shows TRM consistently leading in illicit volume attribution compared to our competitors.

4. Automatic cross-chain tracing

In 2025, most illicit actors don’t stay on one blockchain. They move assets through bridges, swaps, and privacy tools — often in a matter of minutes.

Many tools claim robust cross-chain coverage. In reality, they offer only fragmented snapshots or require analysts to manually stitch together hops. TRM’s tracing engine was built for cross-chain investigations. It allows users to trace assets across 50 blockchains through 640+ cross-chain bridges, all in a single graph.

This capability has been critical in the success of ransomware cases, sanctions evasion tracing, and pig butchering scam investigations.

5. Explainable risk scoring and auditability

“Black box” risk scores don’t hold up in regulatory exams. Compliance teams need to explain how a decision was made — and prove it later. TRM’s scoring engine provides full transparency into:

• What drove a wallet’s score (e.g. exposure, behavior, typology match)
• When attribution changed (real-time event logs and history)
• How internal rules contributed (in TRM Transaction Monitoring)
  

This gives teams compliance confidence in both daily operations and regulatory reviews.

6. Flexible rule building, built for crypto

Legacy transaction monitoring systems were built for fiat — not for multi-asset, multi-chain environments. TRM Transaction Monitoring allows users to build, test, and deploy rules tailored to crypto typologies. Example triggers include:

• Bridging to/from high-risk networks
• Use of known obfuscation services
• Suspicious velocity or layering patterns
• Transfers involving privacy-preserving tokens

7. Unified platform with end-to-end coverage

Today, many compliance teams are still stitching together multiple different vendors to cover wallet screening, transaction monitoring, case management, and investigations. TRM is the only solution offering all of the following in a single platform to support every stage of your investigation:

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This holistic approach to crypto compliance simplifies workflows, improves data consistency, and reduces overhead.

8. Global reach, local expertise

TRM is used by financial institutions, regulators, and law enforcement agencies in over 50 countries. TRM covers a vast range of attribution categories, including attribution across:

• Centralized exchanges
• OTC brokers
• Payment service companies
• High risk exchanges
• Mixers and obfuscation tools
• Scam clusters
• Sanctioned entities
  

TRM also maintains alignment with certain jurisdictional requirements, including the EU’s MiCA, the US Bank Secrecy Act, and FATF’s Recommendation 16 (Travel Rule).

9. Designed for intelligence teams — not just compliance

Most AML tools stop at risk alerts. TRM goes further — supporting full-scope investigations with prosecutor-grade graphing, annotations, and case exports. This makes TRM uniquely useful to:

• In-house intelligence or investigations teams
• FIUs and law enforcement
• Regulators building supervisory technology (SupTech)

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Learn more about TRM’s crypto AML and compliance offerings

Want to see how TRM stacks up in a real-world scenario? Learn more about Compliance360 here, or request a custom demo.

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Frequently asked questions (FAQs)

1. What is crypto AML software?

Crypto AML (anti-money laundering) software helps institutions detect, monitor, and respond to suspicious activity involving digital assets. These tools combine blockchain intelligence with regulatory workflows to support compliance with global AML requirements.

2. Why do financial institutions need crypto-specific AML tools?

Traditional AML systems weren’t designed to analyze blockchain transactions, detect obfuscation patterns, or trace cross-chain movement. Crypto AML and compliance tools like TRM Labs provide the visibility and precision needed to monitor risk in a decentralized, pseudonymous financial ecosystem.

3. What are some common crypto money laundering techniques?

Common tactics include moving funds rapidly through intermediary wallets using cross-chain bridges, mixers, privacy coins, and decentralized exchanges (DEXs) to obscure fund origins. These methods are often layered quickly to evade detection.

4. Who uses crypto AML and compliance software?

A wide range of organizations rely on these tools, including:

• Crypto-native firms (e.g. exchanges, wallet providers)
• Banks and fintechs
• Corporations adopting stablecoins
• Financial intelligence units (FIUs) and regulators
• Law enforcement and cybercrime agencies

5. What does AML mean in the context of crypto?

AML in crypto refers to the processes used to detect and prevent the flow of illicit funds on blockchains. It includes wallet screening, transaction monitoring, and identifying behaviors like layering, structuring, and exposure to sanctioned entities.

6. How does crypto AML software support investigations?

Crypto AML tools enable end-to-end investigations by helping users detect risk, trace asset flows across chains, attribute wallet activity to known actors, and document findings for escalation, reporting, or prosecution.

7. What makes TRM different from other crypto AML providers?

TRM uniquely offers:

• Behavioral risk detection, not just exposure scoring
• Standardized and comprehensive blockchain coverage
• Unmatched data quality
• Automatic cross-chain tracing
• Explainable risk scoring and auditability
• Flexible rule building, built for crypto
• Unified platform with end-to-end coverage
• Global reach, local expertise
• Designed for intelligence teams — not just compliance

8. Can TRM be used for regulatory reporting and compliance audits?

Yes. TRM’s platform provides timestamped logs, transparent scoring, and investigation history — all of which support suspicious activity reports (SARs), internal audits, and regulator requests.

9. Does TRM support compliance across multiple jurisdictions?

TRM maintains alignment with regulatory frameworks globally, including the US Bank Secrecy Act, EU MiCA, FATF standards, and jurisdiction-specific AML rules across Asia, the Middle East, and Latin America.

10. How can I evaluate if TRM is the right fit for my organization?

The best way is to request a custom demo. TRM will walk your team through real use cases aligned with your risk profile, tech stack, and jurisdictional requirements.