If you've read a fintech contract recently, you've seen these acronyms. They look interchangeable; they aren't. Each one addresses a different question, and together they form the compliance backbone of regulated payments.
Why these acronyms exist
All four exist to make sure money moves between known, verified parties for legitimate reasons. They are the regulator's answer to a long history of payments being used to move illicit funds.
KYC (Know Your Customer)
Identify and verify an individual. Government ID, address verification, often a liveness or selfie check. Happens at onboarding and is refreshed periodically. Risk-based: a low-value retail customer gets a light KYC; a high-value institutional client gets enhanced due diligence.
KYB (Know Your Business)
The same, for legal entities. Verify the business exists, identify ultimate beneficial owners (UBOs), check directors and officers, screen the entity. Harder than KYC because beneficial ownership can hide behind layered holding structures.
AML (Anti-Money Laundering)
The umbrella program. AML combines KYC, KYB, ongoing monitoring, sanctions screening, transaction monitoring, suspicious activity reporting, and the policies/training that make it all work. Regulated institutions maintain an AML program proportionate to their risk profile.
KYT (Know Your Transaction)
The crypto-specific control. While KYC asks "who is this," KYT asks "where did this crypto come from and where is it going?" It uses blockchain analytics to trace the history of funds. KYT is what lets you say with confidence that an incoming stablecoin payment didn't originate from a sanctioned wallet or mixing service.
How they fit together
A typical flow: KYC/KYB at onboarding → ongoing sanctions screening → KYT at each transaction → transaction monitoring across patterns → suspicious activity reporting where required. Each control catches a different category of risk.
How they show up in crypto payments
A merchant accepting a stablecoin payment from a customer triggers KYC on the customer, KYT on the incoming funds, sanctions screening on the wallet, and ongoing transaction monitoring on the relationship.
How AXON fits
AXON's hybrid stack incorporates wallet screening and transaction-level checks. (Subject to applicable licensing and partner arrangements.)
AXON's services are subject to applicable licensing and partner arrangements. Nothing on this page constitutes legal, regulatory, tax, or investment advice.
Frequently asked questions
What's the difference between KYC and KYB?
KYC is for individuals; KYB is for legal entities, including beneficial ownership.
Is KYT only for crypto?
The blockchain analytics version of KYT is crypto-specific, but transaction monitoring exists for fiat too.
Who is required to do AML?
Regulated financial institutions and many fintechs. The exact perimeter varies by jurisdiction.
How often is KYC repeated?
Risk-based: typically every 1–5 years for most customers, more often for high-risk profiles.