What is Know Your Transaction (KYT)?
Know Your Transaction (KYT) is the real-time monitoring and risk-scoring of cryptocurrency transactions for AML, sanctions, and counterparty risk. Whereas KYC (Know Your Customer) verifies WHO the user is at onboarding, KYT analyzes WHAT they do — every deposit, withdrawal, and transfer.
What KYT systems analyze
- Source and destination wallet risk scoring (linked to mixers, darknet markets, sanctioned addresses, hacks)
- Transaction patterns (smurfing, layering, structuring)
- Counterparty exposure (VASP-to-VASP risk profile)
- Sanctions list screening (OFAC, EU, UN, Turkish MASAK)
- Velocity rules (unusual frequency or volume vs user baseline)
KYT tooling vendors
Chainalysis Reactor + KYT, TRM Labs, Elliptic, Crystal Blockchain, Scorechain. They maintain massive databases mapping known illicit addresses and provide real-time API screening. Some Turkish VASPs use multiple vendors for redundancy + jurisdictional coverage.
Travel Rule and KYT
The Travel Rule (FATF Recommendation 16) requires VASPs to share originator and beneficiary information for transfers above a threshold ($1,000 / €1,000 typically). KYT systems integrate with Travel Rule messaging protocols (TRP, TRUST, OpenVASP) to support compliance efforts.
Turkish regulatory framework
Under MASAK Law 5549 and the 2024 Crypto-Asset Service Provider (CASP) regulation, Turkish crypto-asset platforms must implement transaction monitoring. KVKK applies to the personal data dimensions — transaction data linked to identified persons is personal data; cross-border sharing of suspicious transaction reports requires careful legal basis analysis.
Practical implications
If you’re building a Turkish CASP or crypto-adjacent product (wallets, on-ramps, bridges): KYT is non-negotiable from day one. Budget for $50k-$300k/year in tooling for a serious product. Document risk thresholds in your AML policy — KVK Kurulu and MASAK both audit this.