Crypto KYT for forex and CFD brokers
Screen every crypto deposit and keep the proof. A broker does not run a crypto exchange, but once a client funds in USDT, the regulator treats that deposit as yours to explain.
Why broker funding is a different problem
An exchange sees a wallet once and can reason about the wallet. A broker sees a customer over months. There is a KYC profile, a declared income, an expected trading pattern, several funding wallets, a ledger and an MT5 account. Eventually there is a withdrawal request, often to a wallet the customer never deposited from. The risk is rarely in the first deposit. It sits in the lifecycle as a whole: fund, barely trade, withdraw elsewhere.
Most screening products were built for exchanges. They return a wallet score and stop there. You are left to assemble by hand what a supervisor asks about. Was the deposit consistent with the customer? Was the transaction real? Did the processor's 'approved' come with any evidence? What did you decide, under which policy, on that day?
What supervisors ask for
Supervisors in Mauritius, Seychelles, Cyprus, the UAE and the BVI ask much the same questions. Did you screen the counterparty against current sanctions data? Can you prove the on-chain transaction existed and matched what you credited? Did you re-screen when the lists changed? Can you reproduce the decision later? Most brokers already do these checks. What they usually lack is a record that answers the examiner's follow-up.
Relying on a third party does not move the obligation. If your payment processor screened the deposit, you still need to show what it concluded and on what evidence. On its own, an approval flag with nothing behind it is only a status.
How KYTGate fits a broker stack
You make one API call per funding event: a deposit, a withdrawal request or a wallet whitelist application. KYTGate verifies the transaction on-chain. It screens the resolved sender against OFAC, UK and EU list data and checks live issuer freeze status. It records what your processor asserted and whether any evidence came with it. It then applies your versioned policy and returns ALLOW, REVIEW, BLOCK_PENDING_MLRO or TECHNICAL_HOLD with a signed Decision Receipt.
Any outcome other than ALLOW opens a case in a queue your compliance officer works from. The queue supports assignment, document requests, escalation and four-eyes closure for blocks. You can also deep-link the same case from your own back office. Your data stays private to your tenant, and nothing about your customers is pooled.
Three common situations
Deposit → no trading → withdrawal to a new wallet
This is the classic pass-through. The on-chain data looks fine, and only the lifecycle gives it away. KYTGate records the deposit decision and the withdrawal request as linked screenings on the same customer, so the pattern shows in the case instead of being reconstructed later.
Processor says 'approved'
KYTGate records processorAssessment APPROVED with processorEvidence MISSING when no evidence reference arrives. The gap shows in your coverage matrix instead of being covered by someone else's confidence. If you already run Sumsub, post its crypto transaction result as it comes back and it is recorded as processor evidence on the same deposit.
Wallet listed after you accepted the deposit
Daily re-screening against fresh list snapshots reopens the question automatically and creates a case. The original receipt stays intact for the day you decided.
Best fit: licensed FX/CFD brokers funding through crypto payment processors in Mauritius, Seychelles, Cyprus, UAE, BVI, Labuan or Vanuatu, with an MLRO who needs records that hold up under examination more than another risk score.
Still working out which obligations apply to you? Who must screen crypto payments sets out the two layers: sanctions, which bind every EU business today, and due diligence, which binds a defined list of sectors from 2027, with the source next to each row.
Decision-support software, not legal advice. Which obligations apply to you depends on your licence and structure; confirm with counsel.