KYC / AML means “Know your customer / money laundering”. KYC and AML follow the instructions of banks, insurance companies, brokers, cryptocurrencies and other similar entities.   
Specific KYC / AML rules may vary by country, but in general, financial institutions will need to know their customers and monitor and report suspicious activity.
In the United States, KYC / AML rules are derived from various laws, regulations, and guidelines, including FINRA guidelines, secret banking divisions, and U.S. PATRIOT laws.
In short, KYC / AML rules are the reason to prove who you are before using most cryptocurrencies.