“Know Your Transaction” Intelligence Suit has been launched by Coinbase: Will it really manage risks?

CoinQuora reported 3days ago on the recent announcement by CoinBase on the launch of a new asset to control and secure crypto transactions. The release came in a blog written by the company’s CEO and co-founder, Brian Armstrong.

The news was shared on Coinbases’ official Twitter account. The company revealed that it has already developed a whole suite of products that will cater to the necessary needs of crypto companies including Alviere, Plastiks, Circle etc, businesses, and financial firms like Standard Chartered, BNY Mellon, etc.

The report went on to say that the Coinbase Know Your Transaction (KYT) was released as part of the product suite. It also improved its previous internal data analytics tool, Coinbase Analytics, which has now been dubbed “Coinbase Tracer.”

This is a great development considering the insecurity in hacking and fraud that has seen both individuals and companies lose millions of dollars in crypto. I actually still don't understand how it helps but the effort I must commend for now as I research further.

According to the American exchange, KYT is a transaction screening tool that financial institutions and cryptocurrency firms may use to proactively manage risk using its patented risk score algorithm.

Does anyone understand it better and kind of explain how it works?