KYT compliance refers to “Know Your Transaction,” a process for monitoring and verifying transactions on blockchain networks. This practice aims to enhance transparency and traceability of funds, particularly to identify illicit activities such as money laundering or fraud.Entities engaged in cryptocurrency often adopt KYT measures to comply with regulations and maintain trust. By analyzing transaction patterns, they can detect suspicious behavior and assess the origin of funds. This involves using software tools that track transactions, evaluate wallet addresses, and provide insights on transaction flow.KYT compliance is crucial for businesses and exchanges that want to ensure they are not inadvertently facilitating illegal activities. It helps mitigate risks associated with regulatory non-compliance and improves overall security in the ecosystem.In summary, KYT compliance serves as a safeguard for both business integrity and legal adherence, promoting a more secure and accountable environment for cryptocurrency transactions.