High-Risk Transactions Compliance refers to the set of practices businesses use to monitor and manage transactions that present a higher likelihood of illicit activity, such as money laundering or fraud. This is particularly important in industries where anonymity is prevalent, making it easier to engage in illegal activities.Entities often assess transactions based on various factors, including the identities of the parties involved, the amount being transferred, and the geographic locations. Transactions from high-risk jurisdictions or involving individuals connected to suspicious activities receive heightened scrutiny.Compliance involves implementing Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. KYC requires organizations to verify the identity of their customers, while AML involves monitoring transactions for unusual patterns that could indicate illicit activity.Failing to comply with regulations can result in significant legal repercussions and financial losses. Therefore, maintaining robust compliance measures helps ensure the integrity of the financial system and enhances trust among users.