A fresh study by MetaComp focusing on stablecoin activity suggests that financial institutions should implement a multi-layered Know Your Transaction (KYT) system. This approach is essential to bolster defenses against money laundering and terrorist financing, addressing significant weaknesses in current AML/CFT practices.
SINGAPORE, July 17, 2025 /PRNewswire/ — With stablecoins becoming increasingly important for international payments, MetaComp Pte Ltd (MetaComp), a payment provider authorized by the Monetary Authority of Singapore (MAS), has released research examining how well current on-chain KYT tools identify AML and CFT risks across major blockchain networks. The findings expose critical deficiencies in current methods of screening crypto transactions for potential financial crimes.
The research analyzed 7,000 randomly selected, real-world transactions on the Ethereum and Tron blockchains. It used four leading KYT platforms: Chainalysis, Elliptic, Merkle Science, and Beosin. By comparing the performance of using one, two, three, and four tools, the study revealed that using only one or two KYT systems failed to identify up to 25% of high-risk transactions. This highlights significant gaps in transaction monitoring and the dangers of relying on insufficient tooling in tightly regulated digital asset markets.
Transaction Screening Methods Questioned
The study analyzed actual transactions using USDT and USDC, the most prevalent stablecoins used in global payments, on the Ethereum and Tron blockchains. MetaComp’s study contrasted the efficiency of using one to four KYT tools per transaction and found that using three tools significantly improved risk detection while maintaining speed sufficient for real-time operation. This delivers a practical and easily scalable model for institutional regulatory compliance.
“For regulated institutions, especially those handling stablecoins, using a single tool for transaction screening isn’t enough,” says Tin Pei Ling, Co-President of MetaComp. “Our research demonstrates that layering KYT tools can drastically reduce oversights and improve the safety of on-chain payment systems. We trust these discoveries will raise the bar for monitoring risks within digital financial environments.”
Key Discovery: Layered Screening Boosts Accuracy
The research found that depending on only one KYT tool could cause as many as 25% of high-risk transactions to be overlooked. This translates to a one in four chance that potentially illicit activities remain undetected due to inadequate screening. These missed high-risk transactions frequently involved connections to sanctioned wallets, stolen funds, darknet-associated operations, cryptocurrency mixers, and fraudulent activity, all generally requiring immediate reporting or escalation.
Conversely, a three-tool screening model reduced the rate of false positives to below 0.10% while keeping screening times under two seconds per transaction. This makes it usable and readily scalable for production setups where immediate results are critical.
The analysis further identified five industry-wide issues that contribute to screening inconsistencies: inconsistent risk data across different tools, varying risk categorization, lack of standardized reporting, operational hurdles in consolidating results, and processing delays from using multiple tools.
The research also showed that Ethereum-based transactions displayed fewer AML/CFT risk signs than those on Tron within the analyzed data. In specific terms, 6.95% of Tron transactions were flagged as having a serious risk, while only 0.70% of those on Ethereum met the same criteria. More than 20% of Tron transactions were ranked at medium-high risk or greater.
Although the study did not directly evaluate blockchain protocols, its results highlight the need for distinct compliance methods tailored to each network’s transaction characteristics.
“We are not comparing one blockchain over another; instead, we are focusing on the type of transactional risks associated with each,” Tin Pei Ling adds. “Each KYT solution offers a distinct view of potential risks. Institutions can no longer rely on only one view; compiling information from several sources is crucial for maintaining regulatory confidence. Our objective is to fill the gaps with a reliable and defendable infrastructure.”
Stablecoins Become a Focus for Institutional Risk Management
USDT and USDC were used in this research due to their significant role in institutional applications such as remittance, settlements, and vendor payments.
MetaComp suggests that at least three on-chain KYT tools be deployed for each transaction to achieve an optimal balance of AML/CFT effectiveness, expense management, and process efficiency. The analysis shows that the use of only one or two tools could cause as much as 25% of high-risk transactions to be improperly cleared, which creates serious regulatory gaps. While using three tools provides a solid baseline, MetaComp employs a four-tool configuration across its CAMP and StableX platforms, enhancing risk detection and stronger regulatory alignment.
Methodology and Scope
The research was conducted using 7,000 randomly selected, real-world transactions involving USDT and USDC on the Ethereum and Tron blockchains. The transaction samples came from live blockchain data gathered on June 26 and 27, 2025, and all MetaComp internal activity was intentionally excluded to ensure the integrity of the research.
The study used four KYT solutions: Chainalysis, Elliptic, Merkle Science, and Beosin, which were selected for their extensive data coverage, specialized understanding of typologies, geographical awareness, and system integration capabilities.
To mitigate the impact of fragmented vendor data, MetaComp applied its own screening process that included:
1. Standardized mapping of risk categories
2. A consolidated risk parameter configuration to meet regulatory requirements
3. A multi-tool screening workflow comprising initial screening, direct exposure evaluation, transaction-level exposure analysis, and wallet-level risk profiling
While the data represents a single point in time, the research provides directional insights into the effectiveness of different KYT screening setups in real-world conditions. By limiting the study sample to two stablecoins and two blockchains, MetaComp highlights the costs associated with using multi-tool setups for genuine cross-border transactions. The research can be used as a basis for further industry discussions about how digital asset companies can meet the growing regulatory demands while maintaining processing speed, lucidity, and cost efficiency.
MetaComp acknowledges the limited timeframe of the research and encourages additional studies to back any extensive generalization of the results.
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About MetaComp
MetaComp, based in Singapore and authorized by the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019, is a leading provider of authorized cross-border FX and digital asset infrastructure. MetaComp functions under a P2B2C (platform-to-business/partners-to-clients) model, empowering institutions, payment processors, fintechs, and international enterprises to confidently navigate cross-border payments and the evolving digital asset economy.
With a sharp focus on compliance, protection, and institutional-grade frameworks, MetaComp delivers complete digital finance solutions, including OTC and exchange trading, fiat payment rails, regulated digital asset storage, and prime brokerage services. MetaComp is a subsidiary of Alpha Ladder Finance Pte. Ltd., a MAS-licensed Capital Markets Services (CMS) licensee and Recognized Market Operator (RMO).
Through its proprietary Client Asset Management Platform (CAMP), MetaComp delivers a highly secure, integrated environment that blends conventional finance with digital assets.
MetaComp’s latest advancement, StableX, is a new-generation cross-border FX and liquidity routing infrastructure designed to simplify and accelerate global fund movements. Powered by stablecoins and USD, StableX optimizes currency exchange and settlements intelligently, enabling quicker, cheaper, and much more competitive international transactions. As the FX layer within CAMP, StableX combines the programmability of digital assets with the reliability of a regulated infrastructure, delivering a scalable, compliant, and integrated ecosystem for the evolution of global finance.
To find out more about MetaComp and its authorized frameworks and solutions, visit www.mce.sg or www.linkedin.com/company/metacompsg/.