MetaComp study urges using three KYT tools for stablecoin checks
A new study by payments infrastructure provider MetaComp highlights critical gaps in the ability of on-chain Know-Your-Transaction (KYT) tools to detect illicit and high-risk activity on blockchain networks.
The research, conducted in Singapore, assessed over 7,000 live transactions involving USDT and USDC – two of the most widely used stablecoins – across the Ethereum and Tron blockchains. The study employed four leading KYT providers: Chainalysis, Elliptic, Merkle Science and Beosin, to determine how effectively high-risk activities such as sanction breaches, exposure to darknet funds and fraud were detected.
Screening practices
Researchers tested multiple screening configurations, ranging from single-tool to four-tool setups, and found that relying on just one or two KYT tools resulted in up to 25% of high-risk transactions being missed. These missed transactions frequently involved wallet addresses connected to illicit finance, fraud-linked flows, and sanctioned entities, leaving significant blind spots for anti-money laundering (AML) and counter financing of terrorism (CFT) compliance.
"For institutions operating in a regulated environment, especially those dealing with stablecoin flows, it is no longer sufficient to rely on a single tool for transaction screening," said Tin Pei Ling, Co-President of MetaComp. "This research provides evidence that layering multiple KYT tools can significantly reduce blind spots and strengthen the integrity of on-chain payment ecosystems. We hope these findings will help elevate industry standards for on-chain risk monitoring and support the development of a more trusted digital finance environment."
The study determined that a three-tool configuration reduced the 'false clean' rate to below 0.10% while maintaining screening speeds of under two seconds per transaction. This demonstrates that enhanced compliance can be achieved without compromising transaction speed, which is essential for real-time payment environments.
Detection effectiveness
One of the key findings from MetaComp's research was that the fragmentation among KYT solutions creates systemic weaknesses. According to the analysis, five main issues contribute to these gaps: inconsistent risk coverage between tools, differences in risk categorisation, lack of standardised outputs, operational difficulties in reconciling results, and increased processing times when using multiple vendors.
The report also revealed differences in risk exposure between the two blockchains studied. Tron transactions exhibited higher AML/CFT risk signals compared to Ethereum. Of the sampled transactions, 6.95% on Tron were flagged as severe risk versus just 0.70% on Ethereum. More than 20% of Tron transactions were assessed at a medium-high or worse risk level.
The research clarified that while the blockchain protocols themselves were not under evaluation, transaction flows differ between networks, suggesting a need for tailored compliance strategies. Tin Pei Ling noted, "We're not comparing blockchain technologies, but rather the nature of the transactional risk flowing through them. Each KYT provider sees different parts of the risk landscape. For institutions, relying on a single perspective is no longer viable – reconciling multiple signals is critical to maintaining regulatory trust. Our goal is to close the gaps with defensible infrastructure."
Industry recommendations
USDT and USDC were the focus of MetaComp's study due to their strong presence in institutional remittance, settlement and merchant payment use cases. The company now recommends a minimum of three simultaneous KYT checks per transaction to achieve an optimal balance between compliance effectiveness, operational cost, and transaction speed. Two-tool or single-tool approaches, according to the research, allow up to a quarter of risky transactions to go undetected.
To further mitigate these risks, MetaComp has implemented a four-tool screening configuration for its own CAMP and StableX platforms, seeking to provide an additional layer of security and regulatory alignment.
Method and scope
The dataset analysed comprised 7,000 real, randomly selected USDT and USDC transactions sampled on Ethereum and Tron during June 2025. The selection intentionally excluded all MetaComp-related activity to preserve the study's independence. The four KYT tools used were selected based on their capabilities in data analysis, typology specialisation, integration and relative market presence.
The research adopted a proprietary screening protocol, standardising risk category mappings and aligning configurations with regulatory expectations. The analysis covered initial transaction checks, wallet-level profiling, and exposure assessments at both the wallet and transaction level.
MetaComp acknowledged that the study's scope was time-limited and encouraged further research to support wider conclusions for the digital asset industry.
