Overview
Know Your Transaction (KYT) is the process of monitoring and analyzing customer transactions in real time to detect suspicious activities and ensure ongoing anti-money laundering (AML) compliance. Zyphe, a decentralized KYC provider, integrates KYT with its decentralized Know Your Customer (KYC) solution to deliver full-cycle compliance – from initial user identity verification to continuous transaction risk monitoring. By combining decentralized identity verification with robust transaction tracking, Zyphe enables businesses to secure every step of the user journey against fraud and financial crime. The KYT system analyzes user behavior patterns, transaction details, and other signals to flag unusual activity, adapting over time to minimize false positives and speed up response to real threats.
Zyphe’s approach offers a unique advantage: privacy-preserving compliance. Traditional KYT solutions require central storage of sensitive personal data, but Zyphe leverages decentralized data storage in full control of the user, reducing risks for all the parties involved. This means personal identifiable information (PII) stays off of central servers, greatly reducing breach risks and preserving user privacy, while still allowing the platform to perform thorough AML checks. In practice, only minimal necessary data or cryptographic credentials are shared with the KYT engine and third-party databases (like sanctions or blockchain analysis tools), ensuring data minimization in compliance workflows. At the same time, all transactions and compliance actions are logged with strong cryptography and, where applicable, blockchain technology, providing an immutable audit trail that guarantees data integrity for regulators and partners.
By using KYT alongside decentralized KYC, Zyphe enables “full-cycle compliance.” This means:
- Pre-transaction: Verifying user identities and risk profiles (KYC/KYB) during onboarding.
- During transaction: Real-time monitoring of user transactions (KYT) for suspicious patterns.
- Post-transaction: Ongoing risk scoring, alerts, and if necessary, case management or regulatory reporting (e.g. filing Suspicious Activity Reports).
This documentation provides a developer-focused overview of Zyphe’s KYT system, including key concepts, user flows, integration steps, API examples, and how the system balances compliance with privacy and security.
| Purpose | Monitors transactions to detect suspicious activity |
| Timing | Continuous, real-time monitoring of transactions |
| Scope | Focuses on transactional behavior and patterns |
| Process | Transaction tracking (e.g. all deposits, withdrawals) and risk scoring based on rules and analytics |
| Key Benefits | Detects illicit activity in real time; protects funds and the platform’s integrity |