Know Your Transaction (KYT)
An ongoing compliance practice that monitors and analyzes individual transactions for suspicious patterns, distinct from the one-time identity check KYC performs.
Know Your Transaction (KYT) is an ongoing compliance practice that monitors and analyzes individual transactions — including their on-chain history and counterparties — for patterns associated with illicit activity, as they actually occur.
KYT is a distinct, complementary practice to Know Your Customer (see Kaavon's "Know Your Customer" glossary definition): KYC is generally a one-time (or periodically refreshed) identity-verification check performed when an account is opened, while KYT is continuous, transaction-level monitoring that happens on an ongoing basis after the account already exists.
Examples
- KYT might flag a transaction connected on-chain to a sanctioned address, even for a customer who already passed KYC identity verification.
- KYC checks who a customer is at account opening; KYT continuously monitors what that customer's transactions actually do afterward.