KYT (Know Your Transaction)
Also known as: Know Your Transaction · Wallet screening · Crypto wallet monitoring · On-chain analysis
Analyzing crypto-asset transactions and wallets to assess the risk of the source and destination of funds, using the public blockchain trail instead of relying only on the customer record.
Legal basis
FATF — Guidance for a Risk-Based Approach to Virtual Assets and VASPs
In crypto, the customer can be known while the money is not. KYT (*know your transaction*) looks at the transaction: where funds come from, which wallets they passed through, whether they touched addresses tied to sanctions, fraud, ransomware or illicit marketplaces. Because the blockchain is a public ledger, that trail can be followed wallet to wallet — the on-chain analysis that complements KYC of the person.
It answers the expectation that anti-money-laundering controls reach virtual-asset service providers (VASPs). In the US, FinCEN treats most crypto exchanges and administrators as money services businesses subject to the Bank Secrecy Act, and screening wallets against OFAC sanctions lists has become a mandatory step: blocking deposits of suspicious origin before they enter the operation. FATF guidance sets the same risk-based approach internationally.
Frequently asked questions
What is KYT (Know Your Transaction)?
It is risk analysis of crypto-asset transactions and wallets — tracing, through the blockchain, the source and destination of funds and whether they passed through addresses linked to crime or sanctions. It complements KYC: beyond knowing the customer, it assesses the money they move.