Know Your Transaction

Know Your Transaction or KYT is a continuous monitoring process used to analyze the movement of digital assets across a blockchain in real-time. Unlike traditional Know Your Customer procedures that verify identity at onboarding, KYT focuses on the history and risk profile of specific transactions.

It uses advanced analytics to track the origin of funds, identifying if assets have interacted with high-risk entities, mixers, or sanctioned addresses. This process is essential for market participants to mitigate the risk of contagion, where illicit funds might contaminate legitimate trading pools.

By applying behavioral analysis to on-chain data, KYT tools can flag suspicious patterns such as layering or rapid asset transfers. It provides the necessary data for platforms to make informed decisions about whether to accept, hold, or reject a transaction.

This ongoing surveillance is a cornerstone of modern financial integrity in crypto markets.