KYT & Blockchain Transaction Monitoring Requirements

Know Your Transaction Standards for Digital Asset Firms

Know Your Transaction (KYT) refers to the continuous monitoring of cryptocurrency transactions to detect suspicious or illicit activity. This whitepaper examines how centralized exchanges deploy real-time blockchain analytics tools - including Chainalysis KYT, TRM Labs, and Elliptic - to screen transactions against databases of sanctioned addresses, darknet markets, ransomware wallets, and mixing services. It covers the full KYT operating model: automated rule-based alerts, case management, SAR filing obligations, Currency Transaction Report requirements, and FATF Travel Rule compliance via platforms such as Notabene, TRISA, and Sygna. The whitepaper also addresses the structural absence of KYT in DeFi protocols, the role of blockchain analytics in external monitoring of DeFi flows, and the growing role of fraud-risk platforms such as Sardine in supplementing on-chain surveillance with off-chain behavioral signals.
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24.2

Illicit crypto volume in 2023 measured in billion according to the Chainalysis annual report.

30

Suspicious Activity Report filing deadline in the United States, measured in days from the date suspicious activity is detected.

10000

Currency Transaction Report cash threshold in the United States, set at ten thousand dollars and triggering mandatory reporting.

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Key Takeaways

Five key takeaways on how crypto transaction monitoring and reporting works in practice, from real time blockchain analytics and exchange surveillance systems to regulatory reporting requirements and the limits of compliance in DeFi.