KYT stands for “Know Your Transaction.” This policy is focused on monitoring and analyzing transactions to ensure compliance with regulations and to mitigate risks associated with money laundering and fraud.KYT involves tracking the flow of money through various digital wallets and exchanges. It aims to identify suspicious activities, unusual transaction patterns, or connections to illicit sources. By doing so, businesses can take proactive measures to prevent financial crimes.This approach is particularly important for exchanges and financial institutions dealing with cryptocurrency, as they must adhere to anti-money laundering (AML) regulations. Implementing a KYT policy helps them to verify that their services are not being used for illegal activities.In summary, a KYT policy emphasizes the importance of understanding the source and destination of funds in transactions. This contributes to a safer and more transparent environment for users and helps businesses avoid legal repercussions.