<blockquote>
<p>I would like to know if providing one of the sender addresses is good enough for the KYT service to determine if the transaction is high risk</p>
</blockquote>
<p>I don't see how it could be good enough. If one of the other sender addresses is high risk, your service would give a false result. Wouldn't you knowingly have failed to adequately assess the risk and thereby aided in the processing of criminally obtained funds? At the least it seems negligent.</p>
<p>However I am not a KYT compliance officer, just some random person in the Internet. You should probably instead ask both your KYT service and a lawyer.</p>

CC BY-SA 4.0
2022-08-04T10:01:42.360Z
As you can see in the below transaction, there are 4 input addresses. So if the KYT service is intelligent enough, it would check all four input addresses. This is essentially my question. Apologies for not clarifying.
https://www.blockchain.com/btc/tx/6faef7b9cd63eaaa217006f6f52c2a42c898842987167bdd36331eac3413423b
Don't Mind Me
CC BY-SA 4.0
2022-08-04T11:06:50.603Z
To provide an accurate and complete assessment of a transaction, the KYT service must check every input to that transaction. If the KYT service does this for any referred transaction, you don't need to provide any addresses at all. I suggest you ask your KYT service about this.
RedGrittyBrick
CC BY-SA 4.0
2022-08-05T08:11:34.590Z
The thing is we pay for a third party fraud prevention service who have a direct connection with Coinbase Analytics, so I thought I had a better chance asking here, but I will send them my query now and see what they say.
Don't Mind Me
CC BY-SA 4.0
2022-08-04T09:46:58.797Z
2022-08-04T09:46:58.797Z
RedGrittyBrick
<p>Due to the recent change in regulatory bodies, crypto businesses are now being asked to prevent their customers from facilitating transactions used for money laundering and other illicit activities such a purchasing illegal goods or services. A preventative measure called Know Your Transaction (KYT) has become a necessity to combat this.</p>
<p>KYT services use on-chain analysis to determine if a sender's address is high or low risk.</p>
<p>However I have recently come across the issue that some bitcoin transactions appear to have multiple input addresses (<a href="https://www.blockchain.com/btc/tx/6faef7b9cd63eaaa217006f6f52c2a42c898842987167bdd36331eac3413423b" rel="nofollow noreferrer">example</a>). I have read some posts here outlining that it is difficult to determine the true sender address from one of these transactions.</p>
<p>I would like to know if providing one of the sender addresses is good enough for the KYT service to determine if the transaction is high risk, or should I attempt to pass each of the sender addresses (for multi-sender transactions) as separate transactions. One drawback of the latter is that we pay per usage for each sender address, so it would result in higher fees.</p>
<p>I would like to point out that:</p>
<ol>
<li>I am using Coinbase Analytics</li>
<li>I'm not sure if this is relevant but the transaction occurs on-chain and if it is flagged as high risk we would return the BTC to the customer</li>
</ol>

CC BY-SA 4.0
2022-08-04T07:34:54.013Z
The intersection of regulating bodies and technical reality is where things stop really making sense. 'To' and 'from' labels exist at the human-interaction-layer, and the human-interaction-layer may actually map very poorly onto the bitcoin-movement-layer. In fact, the bitcoin-movement layer may not look anything like the human-interaction-layer at all! So whatever way you end up interpreting and implementing this regulatory policy, it'll probably not match reality perfectly well
chytrik
CC BY-SA 4.0
2022-08-04T08:07:19.863Z
@chytrik I would like to point out that we generate a wallet address for the customer to send us BTC, so I know the receiver address but not the sender address. Apologies if this is not what you meant.
Don't Mind Me
CC BY-SA 4.0
2022-08-06T06:12:16.843Z
Yes, I did understand that. Your job here is just tough, as the regulators want their policy followed, even if it is nonsensical at a technical level. I'm sure there will be some method that is considered 'best practices' you will unfortunately have to follow, but as @redgrittybrick mentioned, thats a question best directed to your compliance team / lawyers / etc.
chytrik
<transactions><chainanalysis>
How provide a sender address to a Know Your Transaction service
Don't Mind Me
# How provide a sender address to a Know Your Transaction service

(Asked by: username_0 on 2022-08-04)

Due to the recent change in regulatory bodies, crypto businesses are now being asked to prevent their customers from facilitating transactions used for money laundering and other illicit activities such a purchasing illegal goods or services. A preventative measure called Know Your Transaction (KYT) has become a necessity to combat this.

KYT services use on-chain analysis to determine if a sender's address is high or low risk.

However I have recently come across the issue that some bitcoin transactions appear to have multiple input addresses ([example](https://www.blockchain.com/btc/tx/6faef7b9cd63eaaa217006f6f52c2a42c898842987167bdd36331eac3413423b)). I have read some posts here outlining that it is difficult to determine the true sender address from one of these transactions.

I would like to know if providing one of the sender addresses is good enough for the KYT service to determine if the transaction is high risk, or should I attempt to pass each of the sender addresses (for multi-sender transactions) as separate transactions. One drawback of the latter is that we pay per usage for each sender address, so it would result in higher fees.

I would like to point out that:

1. I am using Coinbase Analytics
2. I'm not sure if this is relevant but the transaction occurs on-chain and if it is flagged as high risk we would return the BTC to the customer

**Tags:** transactions, chainanalysis

> **Comments:**
> **username_1**: The intersection of regulating bodies and technical reality is where things stop really making sense. 'To' and 'from' labels exist at the human-interaction-layer, and the human-interaction-layer may actually map very poorly onto the bitcoin-movement-layer. In fact, the bitcoin-movement layer may not look anything like the human-interaction-layer at all! So whatever way you end up interpreting and implementing this regulatory policy, it'll probably not match reality perfectly well  
> **username_0**: @username_1 I would like to point out that we generate a wallet address for the customer to send us BTC, so I know the receiver address but not the sender address. Apologies if this is not what you meant.  
> **username_1**: Yes, I did understand that. Your job here is just tough, as the regulators want their policy followed, even if it is nonsensical at a technical level. I'm sure there will be some method that is considered 'best practices' you will unfortunately have to follow, but as @redgrittybrick mentioned, thats a question best directed to your compliance team / lawyers / etc.  

---

## 1 answers

### Answer by username_2 on 2022-08-04. Score: 1

> I would like to know if providing one of the sender addresses is good enough for the KYT service to determine if the transaction is high risk

I don't see how it could be good enough. If one of the other sender addresses is high risk, your service would give a false result. Wouldn't you knowingly have failed to adequately assess the risk and thereby aided in the processing of criminally obtained funds? At the least it seems negligent.

However I am not a KYT compliance officer, just some random person in the Internet. You should probably instead ask both your KYT service and a lawyer.

> **Comments:**
> **username_0**: As you can see in the below transaction, there are 4 input addresses. So if the KYT service is intelligent enough, it would check all four input addresses. This is essentially my question. Apologies for not clarifying. https://www.blockchain.com/btc/tx/6faef7b9cd63eaaa217006f6f52c2a42c898842987167bdd36331eac3413423b  
> **username_2**: To provide an accurate and complete assessment of a transaction, the KYT service must check every input to that transaction. If the KYT service does this for any referred transaction, you don't need to provide any addresses at all. I suggest you ask your KYT service about this.  
> **username_0**: The thing is we pay for a third party fraud prevention service who have a direct connection with Coinbase Analytics, so I thought I had a better chance asking here, but I will send them my query now and see what they say.  

---

