Writing an AML policy for a crypto company: the ten sections regulators read first
Writing an AML policy is the single document that determines whether your crypto licence application moves forward or stalls. Regulators read it in a fixed order, and the first ten sections carry most of the weight.
Why the AML policy is the first document regulators open
When you apply for a licence under MiCA in the EU, or for registration in a jurisdiction such as Panama, the AML policy is not a formality. It is the document that shows whether your compliance function exists in substance or only on paper. Supervisors in Estonia, Lithuania, Malta and other EU hubs have become considerably more demanding since MiCA came into force across the EU in 2026, and the AML policy is usually the first file they open.
The reason is practical. A licence application tells the regulator what you intend to do. The AML policy tells them how you will stop that activity being used for money laundering, terrorist financing and sanctions evasion. If the policy is generic, copied from a template or silent on the risks specific to your business model, the application is typically returned with questions or refused.
This article sets out the ten sections that regulators tend to read first, in the order they usually appear. It is not a substitute for legal advice, and the exact expectations differ between national competent authorities, but the structure below reflects what experienced reviewers look for.
Sections 1 to 3: scope, risk assessment and governance
Section one is the scope and definitions. Regulators want to see, in plain language, which entities, products and customer types the policy covers. If you operate a spot exchange, a custody service and a fiat on ramp, say so. If certain activities sit outside the policy, explain why. Vague scope language is one of the most common reasons a policy is rejected, because it makes the rest of the document unenforceable.
Section two is the business wide risk assessment. This is where you demonstrate that you understand your own exposure. Cover customer risk, product risk, geographic risk, delivery channel risk and transaction risk. For crypto firms, that means addressing self hosted wallets, mixers, privacy coins where relevant, cross border flows and the volatility of some customer segments. The assessment should be dated, reviewed at least annually and signed off by senior management.
Section three is governance and accountability. Name the roles, not just the job titles. Who is the nominated officer or MLRO. Who sits on the compliance committee. What are the reporting lines to the board. Regulators look for evidence that compliance has authority and resources, not just a box on an organogram. In smaller firms, one person may hold several roles, but the policy should explain how conflicts are managed.
Sections 4 to 6: customer due diligence, monitoring and reporting
Section four covers customer due diligence. This is the operational heart of the policy. Set out your identification and verification standards for individuals and legal entities, the documents you accept, the timing of verification, and how you handle customers who cannot be verified. Include your approach to simplified and enhanced due diligence, and explain when you apply each. Politically exposed persons, high risk jurisdictions and complex ownership structures should trigger enhanced measures.
Section five is ongoing monitoring and transaction screening. Regulators expect to see how you monitor activity after onboarding, not only at the point of entry. Describe your transaction monitoring rules or scenarios, your thresholds and how alerts are investigated. If you use blockchain analytics tools, name the categories of tools and explain how you use them. If you rely on manual review, explain the capacity and the escalation path. The policy should also cover periodic KYC refresh and trigger events such as a change of ownership or a sanctions hit.
Section six is reporting and record keeping. This section should describe how you file suspicious activity reports, who approves them, and the internal timeline from alert to filing. It should also cover record retention periods, which in most EU jurisdictions are five years after the end of the relationship, and how records are stored and protected. Regulators read this section closely because it shows whether your firm can actually cooperate with law enforcement when required.
Sections 7 to 8: sanctions, training and independent review
Section seven is sanctions and screening. Even firms that are not banks need a clear sanctions compliance programme. Explain how you screen customers, beneficial owners, counterparties and wallet addresses against relevant lists, how often you rescreen, and what you do when you get a match. False positives should have a documented resolution process. If you operate in the EU, note that sanctions enforcement has become more active, and regulators expect screening to be automated where volumes justify it.
Section eight is training and awareness. A policy that nobody has read is a liability. Describe who receives training, how often, what the content covers and how attendance is recorded. Role specific training for compliance staff, customer facing teams and senior management is viewed favourably. Include how you test understanding and how you handle staff who fail to complete training.
Section nine, often grouped with training, is the independent audit or review function. Regulators want to see that someone outside the first line of defence tests the policy at least annually. Whether that is an internal audit team or an external firm, the policy should state the frequency, the scope and how findings are reported to the board. This section is frequently thin in first drafts and frequently questioned as a result.
Section 10 and the capital question: tying the policy to your licence
Section ten is the review, escalation and change management clause. It should state how often the policy is reviewed, who approves changes, and how you track regulatory developments. In the EU, MiCA and the AML package have both evolved, so a policy that has not been reviewed since 2024 will raise questions. Include a version control table and a clear owner for each section.
The policy does not stand alone. Under MiCA, EU CASPs must meet minimum own funds requirements that vary by activity class, commonly cited as EUR 50,000, EUR 125,000 or EUR 150,000 depending on the services provided. The AML policy should be consistent with the governance and resourcing described in your licence application. If your policy promises a large compliance team but your financial projections do not fund it, reviewers notice.
For founders also considering Panama, the picture is different. Panama has no dedicated crypto licence, so the common route is to incorporate a Sociedad Anonima, which can be done in roughly two to three weeks. Panama generally applies a territorial tax system, with 0% tax on foreign source income in many structures. That does not remove AML obligations if you serve EU customers or touch EU rails, and a credible AML policy remains part of banking and payment access. If you want help drafting a policy that fits your licence strategy, the team at Consulting24 works with founders on exactly this.
How to Choose the Right Jurisdiction
Work the decision in this order: customers first, everything else second:
- Who are your customers? EU retail means you need a MiCA passport (Lithuania, Malta or another EU CASP). US customers mean state-by-state money-transmitter licensing or a FinCEN MSB, so consider a Canada MSB or a US setup. Latin America, Asia or HNW clients mean an offshore or territorial base such as Panama is usually the better fit.
- Do you need a regulator badge? A public-facing exchange chasing institutional partners and fundraising often needs the reputational lift of an EU, Swiss or VARA licence. An OTC desk or token treasury usually does not.
- What is your budget and timeline? Offshore and territorial routes set up in weeks for tens of thousands; premium onshore licences take many months and six figures.
- What about tax? Territorial-tax jurisdictions like Panama charge 0% on foreign-source income; EU jurisdictions apply standard corporate tax. Factor total cost of ownership, not just setup fees.
For many offshore-first founders, Panama lands at the intersection of fast incorporation, low cost and 0% tax on foreign-source income, which is why it features so heavily in our work. But the honest answer is that the “best” jurisdiction is the one that matches the four answers above, and that is a conversation worth having before you spend a cent. See our cost breakdown and application process to ground the decision in real numbers.
Banking and Compliance: Where Most Setups Actually Stall
Incorporation is the easy part of any crypto project. Banking is where timelines slip and where under-prepared founders lose months. Since 2023, banks and payment processors worldwide have tightened their onboarding of crypto-adjacent businesses, and they now expect a genuinely professional application , not a one-page business summary. A thin file is simply rejected, and re-applying with the same bank is far harder than getting it right the first time.
Three documents do the heavy lifting. The first is a written AML/KYC compliance program: your customer-onboarding flow, transaction-monitoring rules, sanctions and PEP screening, a named compliance officer, and record-keeping policies. The second is a clear, evidenced source-of-funds file for both the company and its beneficial owners. The third is a coherent business description that explains who your customers are, how money moves, and what volumes you project. Banks approve businesses they understand; ambiguity reads as risk.
Sequencing matters as much as substance. The correct order is: incorporate the operating entity, build the compliance program, assemble the source-of-funds package, and only then approach banking, ideally through a warm introduction rather than a cold application. Founders who approach banks mid-setup, before their file is complete, create the very delays they are trying to avoid. We make direct introductions to banks and crypto-friendly payment rails as part of every engagement, but the introduction only works if the file behind it is ready.
None of this is optional, and none of it changes much from one jurisdiction to the next, the compliance bar is now broadly global. What changes is the appetite of local banks and the speed of onboarding. Our requirements checklist sets out exactly what you need to assemble before you approach a bank.
Crypto Licensing in 2026: The Bigger Picture
Choosing where to license a crypto business in 2026 is no longer a simple cost calculation. The regulatory map has hardened considerably over the last three years. In the European Union, the Markets in Crypto-Assets Regulation (MiCA) has replaced the patchwork of national VASP registers with a single Crypto-Asset Service Provider (CASP) authorisation that passports across all 27 member states. That passport is powerful, but it comes with capital requirements, governance obligations and a multi-month authorisation process that smaller projects often underestimate.
Outside the EU, the picture is more varied. Offshore and territorial-tax jurisdictions compete on speed, cost and privacy, while major financial centres such as Switzerland, the UAE and Singapore compete on credibility and institutional access. The Financial Action Task Force (FATF) sits over all of them: its “travel rule” and AML standards now apply, in some form, almost everywhere a serious crypto business would consider basing itself. Jurisdictions that ignore FATF expectations end up grey-listed, which quietly closes correspondent-banking doors for every company registered there.
This is why the question behind Writing an AML policy is rarely “which licence is cheapest?” It is “which regime matches my customers, my risk appetite and my banking needs?” An EU-retail exchange and an offshore OTC desk serving high-net-worth clients in Latin America have almost nothing in common in terms of the right base. Getting this decision right at the start saves you from the single most expensive mistake in the industry: licensing in the wrong place and having to re-domicile a live business.
Consulting24 has guided more than 200 crypto company setups across 15+ jurisdictions since 2017, which means we have seen how each of these regimes behaves in practice rather than just on paper. The summary below is the same framework we use with clients, and we are always happy to map it to your specific model. Start with our Panama vs Lithuania comparison to see how the trade-offs play out between an offshore base and an EU-passported one.
Common Mistakes to Avoid
The failures we see when founders research Writing an AML policy on their own are remarkably consistent, and almost all of them are avoidable. The first is licensing to the headline tax rate. A 0% jurisdiction is worthless if your customers legally require a regulated provider you cannot become there, and you will simply have to start again. Decide who you are allowed to serve first, then optimise for tax.
The second is treating the compliance program as paperwork. The AML/KYC program is not a formality to satisfy a regulator; it is the document your bank reads most closely. A generic template downloaded from the internet is transparent to any compliance officer and will sink your banking application. It needs to reflect your actual product, customer base and risk profile.
The third is underestimating banking lead time. Founders routinely budget for incorporation and forget that the bank account, the thing that actually lets the business operate, can take longer than the licence itself. Build banking into your launch timeline from day one, not as an afterthought.
The fourth is ignoring personal tax residency. A company in a low-tax jurisdiction does not erase your obligations where you personally live. Many founders create unexpected liabilities by structuring the company perfectly and ignoring themselves. We introduce qualified tax advisors precisely to close this gap.
The fifth and most expensive is choosing a provider on price alone. The cheapest setup that results in a rejected bank application or a re-domiciliation is far more expensive than doing it properly once. Ask any provider to itemise their fee and explain their banking track record before you commit.
What Happens After You Are Licensed
Getting licensed and banked is the start, not the finish. Every regulated or registered crypto business carries ongoing obligations, and letting them lapse is how companies lose their standing, and their banking. At minimum you will maintain a registered agent or local presence, file annual renewals or supervision fees, keep accounting records, and keep your compliance program live with periodic reviews and updated sanctions and PEP screening lists.
Most jurisdictions also expect you to keep your beneficial-ownership information current and to report material changes, new directors, new shareholders, a pivot in business activity, promptly. Transaction monitoring is not a one-time setup either; screening rules need tuning as your volumes and customer mix evolve. Banks may request periodic refreshes of your KYC and source-of-funds documentation, particularly after a year of trading or a significant change in activity.
This is why we offer ongoing maintenance on an annual retainer rather than treating setup as a one-off transaction. The cost of staying compliant is a fraction of the cost of losing a banking relationship and having to rebuild one from scratch. Plan for it in your year-two budget from the outset, and treat your compliance function as a living part of the business rather than a box you ticked at launch.
It is also worth planning ahead for growth. A structure that suits a pre-revenue startup may not suit the same company once it is processing meaningful volume, adding new product lines, or expanding into new markets. Many of the businesses we work with begin in a fast, low-cost offshore base to validate the model, then add a second regulated entity, an EU CASP, for example, once revenue justifies the cost and the market access genuinely matters. Designing the first structure with that possible second step in mind keeps your options open and avoids a disruptive re-domiciliation later. We map this growth path out with clients during the initial planning stage so the early decisions support, rather than constrain, where the business is heading.
Consulting24 has completed 200+ crypto company setups across 15+ jurisdictions. Talk to our team for a fixed-fee proposal and realistic timeline.
Learn more WhatsApp usEmail mardo@consulting24.co · Phone +372 58155779
About Consulting24 & Mardo Soo
Founder & CEO, Consulting24 · LinkedIn
Consulting24 is an eight-year-old advisory firm that has completed 200+ crypto company setups across 15+ jurisdictions since 2017. Founder and CEO Mardo Soo and the team specialise in crypto, VASP and exchange licensing, from Panama and the EU (MiCA) to Dubai, Canada and the offshore world. We don't push a single “best” jurisdiction; we map your business to the regime that actually fits, then handle incorporation, the AML/KYC compliance program, and banking and payment-processor introductions end to end.
Every engagement begins with an honest conversation about your customers, budget and timeline and ends with a fixed-fee proposal, so you know the all-in number before you commit. We also introduce vetted local lawyers and tax advisors wherever your structure requires them.
Operated by X24Consulting OÜ (Estonian Business Register code 16971898), Põrdi tn 3-63, 10156 Tallinn, Estonia · mardo@consulting24.co · +372 58155779
Frequently Asked Questions
How long should an AML policy for a crypto company be?
There is no fixed page count. A focused policy for a single activity firm is often 20 to 40 pages, while a group covering multiple entities and products can run considerably longer. Regulators care more about specificity than length. A short policy that addresses your actual risks is stronger than a long template that does not.
Can I use a template for writing an AML policy?
A template can be a starting point, but submitting an unmodified template is one of the most common reasons for rejection. Reviewers can usually tell. You need to adapt the risk assessment, monitoring rules and governance sections to your business model, your jurisdictions and your customer base.
Who should sign the AML policy?
The policy should be approved at board or senior management level, and the sign off should be documented with a date. In many firms the MLRO or nominated officer owns the document, but the board retains ultimate responsibility. Regulators look for evidence that senior management has actually reviewed and endorsed it.
How often should the AML policy be reviewed?
At least annually, and also after material changes such as a new product, a new jurisdiction, a change in ownership or a significant regulatory update. MiCA and the EU AML framework have both changed in recent years, so a policy that has not been reviewed since 2024 is likely to attract questions.
Does a Panama company need an AML policy?
Panama does not have a dedicated crypto licence, and the common route is a Sociedad Anonima, typically set up in two to three weeks. Even so, an AML policy is often needed for banking, payment processing and any EU or UK facing activity. It is also good practice for managing counterparty risk.
What are the MiCA capital requirements for a CASP?
MiCA sets minimum own funds requirements by activity class, commonly cited as EUR 50,000, EUR 125,000 or EUR 150,000 depending on the services authorised. The exact figure depends on the class of services. Your AML policy should be consistent with the governance and resourcing described in the licence application.
How detailed should the transaction monitoring section be?
Detailed enough that a reviewer can understand your rules, thresholds and escalation path. You do not need to publish every scenario, but you should describe the categories of monitoring, the tools used and how alerts are investigated and closed. If you use blockchain analytics, explain how the outputs feed into decisions.
Where can I get help writing an AML policy?
Specialist consultants who work with crypto licensing can help. Consulting24 at https://www.consulting24.co/ advises founders on AML policy drafting, MiCA applications and offshore structures. A good consultant will tailor the policy to your business rather than hand you a generic document.
Related reading
More crypto-license guides on this blog
- Crypto License in Panama: Cost, Requirements & Setup (2026)
- Crypto Exchange License: How and Where to Get One in 2026
- Crypto License Cost by Jurisdiction: 2026 Comparison
Related crypto licensing routes
A few relevant guides on consulting24.co, each with real cost, timeline and requirements:
This article reflects 2026 market conditions and is general guidance, not legal or tax advice. Regulations change, so confirm specifics with qualified counsel before acting. Consulting24 (X24Consulting OÜ, Estonian reg. 16971898) introduces vetted local lawyers and tax advisors during every engagement.
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