KYT Explained: Crypto Transaction Monitoring for UAE Businesses
Know Your Transaction (KYT) explained: what it is, why UAE regulators expect it and how to screen wallets and transactions for risk.
KYC tells you who your customer is. KYT, Know Your Transaction, tells you where their crypto came from and where it is going. For any business that touches virtual assets in the UAE, it has become a core control.
What KYT does
KYT tools analyse blockchain data to assess the risk of wallet addresses and transactions. They link addresses to known entities and flag exposure to risks such as sanctioned parties, scams, darknet markets, mixers or stolen funds.
Why UAE regulators expect it
UAE AML/CFT rules require ongoing monitoring of customer activity, and for virtual assets that means looking on-chain. VARA, ADGM, the DFSA and the CMA all expect licensed firms to monitor transactions in a way that fits their risk profile. Banks and counterparties also increasingly ask for evidence of wallet screening.
When to screen
- Before accepting a deposit from an external wallet
- Before sending a withdrawal to an external wallet
- When onboarding a customer who declares wallets
- On an ongoing basis, as risk information about addresses changes
Turning alerts into decisions
A KYT alert is the start of a review, not the end. Firms need clear thresholds, escalation to the MLRO, documented decisions and, where appropriate, suspicious transaction reports through goAML. VAF Global's KYT tool at wallet.vaf.global helps you screen wallets and transactions quickly.
Key takeaways
- KYT screens wallets and transactions for illicit exposure.
- UAE regulators expect on-chain monitoring as part of AML/CFT.
- Alerts need a documented review and escalation process.
Related licence guides
Need help with this?
Talk to our compliance team about your licence, AML/CFT framework or transaction monitoring.
This article is general information, not legal advice. Regulatory requirements change; confirm current rules with the relevant regulator.