Can your business afford to ignore Know Your Transactions (KYT) in Web3? In 2024, over $1 billion was lost to crypto scams like phishing and contract hacks. This shows how risky it is to operate in the Web3 space. KYT (Know Your Transactions) can help protect your business by monitoring blockchain transactions in real-time.

Unlike KYC (Know Your Customer), which verifies customers’ legal identity to understand their risk and financial profiles, KYT (Know Your Transactions) checks the legitimacy of a transaction. It helps spot risky activities and keeps businesses secure.

If your business works in Web3, KYT is a must.

Why Businesses Need KYT in Web3

Think of KYT like an alarm system. It alerts you to potential problems before they get worse.

KYT tools track where money is coming from and going to. This allows you to monitor transactions for fraud and ensures compliance.

Adopting KYT signals a commitment to security and compliance, helping businesses build trust with clients, users, investors, and regulators. These tools are scalable, able to grow with your business to manage increasing transaction volumes without compromising security.

What are the Benefits of KYT?

Here’s how KYT benefits your business:

• Fraud Detection and Prevention: KYT tools identify suspicious transactions in real-time, such as unusual volumes or connections to flagged wallets. By preventing fraud, businesses protect assets, reduce downtime, and boost ROI.

• Regulatory Compliance: As global regulators increase scrutiny, KYT ensures compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) standards. This proactive approach shields businesses from costly penalties and boosts investor confidence — critical for long-term growth.

• Reputation and Trust: Implementing KYT shows your commitment to transparency and compliance, building trust with users, investors, and regulators. This increases brand value and attracts long-term partnerships.

• Alignment with Web3 Growth: The decentralized economy requires security and accountability. KYT mitigates risks, allowing businesses to innovate confidently and scale securely, ensuring sustainable growth.

While the benefits of KYT are clear, business leaders often have concerns about cost, complexity, and implementation. However, KYT tools are designed to scale with your business, handling growing transaction volumes without sacrificing security. The cost of inaction—compliance penalties, reputational damage, and lost opportunities—far outweighs the investment in proactive monitoring. By adopting KYT, your business is positioned for long-term success in an increasingly complex environment.

The Big 3 of Web3 Compliance: KYC, KYB, KYT

The vulnerabilities mentioned earlier highlight the need for proactive solutions to safeguard Web3 platforms. Businesses that ignore these risks could suffer reputational damage, loss of user trust, and costly regulatory penalties. KYT is not just a compliance tool — it’s a strategic asset for securing trust and succeeding in the Web3 economy.

On the other hand, a KYB check makes sure a business is an established legitimate entity, and not a scammer, before you work with them.

While KYC and KYB are necessary, KYT focuses on transaction behaviors. It monitors how people use blockchain to catch fraud. Here’s how the three differs 

• KYC: Verifies who your customers are.

• KYB: Checks if your business partners are legit.

• KYT: Tracks transactions to prevent fraud.

Table 1 KYC VS KYT VS KYB

KYT Benefits in Web3: Real-World Use Cases

Here’s how KYT is helping businesses:

• DeFi (Decentralized Finance): KYT stopped a $98.23 million worth of possible losses in 2022, then hindered another $10 million attack in 2023. These incidents highlight the importance of KYT solutions, in which ChainUp has been strategically involved since 2022, through BEOSIN.

• NFT Marketplaces: It helps stop money laundering on platforms like OpenSea.

• Gaming & Metaverse: After the Axie Infinity hack, KYT stopped more fraud.

• Supply Chains: Companies like VeChain use KYT to stop fake products.

• Cryptocurrency Exchanges: KYT detected and prevented a $5 million wash trading scheme on major exchanges such as Binance and HTX.

As Web3 grows, KYT will only become more important. It’s now even powered by advancements in AI and decentralized identity systems. Businesses adopting KYT early will help build a safer, more compliant decentralized economy.

Streamlining System Integration for Seamless KYT Integration

Adopting KYT in Web3 demands smooth integration with existing systems. Aligning traditional infrastructure with decentralized frameworks can be challenging but is critical for secure operations. By prioritizing seamless implementation, businesses ensure compatibility, minimizing security and compliance risks.

Monitoring Multi-Chain Transactions with KYT

As multi-chain ecosystems grow, businesses must track transactions across blockchains like Ethereum and Solana. KYT tools must deliver real-time monitoring for diverse digital assets, providing comprehensive visibility and reducing fraud risks across decentralized platforms.

Leveraging AI for Proactive Threat Detection

KYT tools must evolve to counter emerging fraud and regulatory changes. AI and machine learning enable rapid, accurate anomaly detection in transaction data. These technologies ensure businesses stay ahead of threats, offering real-time protection and continuous updates critical to navigating the fast-changing Web3 landscape.

KYT: A Foundation for Security and Growth in Web3

Advanced KYT tools safeguard businesses in Web3, ensuring compliance, reducing risks, and fostering innovation. Without them, companies face heightened vulnerabilities, including fraud and reputational damage. By adopting KYT, businesses build trust, enhance operations, and secure their place in the evolving digital economy.

ChainUp’s AI-powered KYT solutions make compliance simple. Our tools use advanced AI to track transaction behaviors, flag unusual activity, and reduce risks. Whether you’re integrating blockchain payments, setting up AML (Anti-Money Laundering) tools, or exploring Web3 opportunities, ChainUp provides secure and scalable solutions designed for growth.

Partnering with experts like ChainUp is essential in navigating Web3. Backed by global certifications, our solutions are trusted to help businesses stay compliant with regulations while keeping operations secure. We manage the technicalities of implementing KYT tools, so you can focus on growing your business.

Web3 compliance doesn’t have to be complicated. ChainUp’s tools integrate smoothly with your systems, giving you peace of mind while keeping your business protected. Let us manage the challenges of compliance and security so you can focus on innovation.