Currency Transaction Report (CTR)
With Suspicious Activity Reports (SARs) covering suspicious activity, let's look at the other major reporting requirement: the Currency Transaction Report, which applies to all large cash transactions regardless of whether they seem suspicious.
What Is a CTR?
- A Currency Transaction Report (CTR) must be filed for cash transactions exceeding $10,000 in a single business day
- Filed with the Financial Crimes Enforcement Network (FinCEN) within 15 calendar days of the transaction
- Unlike a SAR, a CTR does not require suspicion; it is a mandatory, automatic filing for all qualifying cash transactions
- Applies to deposits, withdrawals, exchanges of currency, or other payments and transfers involving cash
Think of it this way: A CTR works like a speed camera on a highway. It does not matter why you are driving fast or whether you have good intentions. If you go over the limit, the camera fires automatically. Similarly, any cash transaction over $10,000 triggers a CTR filing regardless of the circumstances.
Key CTR Rules
- The $10,000 threshold applies to a single business day, not a single transaction
- Multiple transactions that total over $10,000 must also be reported if the firm knows they are by or on behalf of the same person
- The customer may be aware that a CTR is being filed (unlike a SAR, there is no tipping-off prohibition for CTRs)
- Records must be retained for five years from the date of the report
SAR vs. CTR Comparison
This is a high-frequency exam topic. Know the differences cold:
| Feature | SAR | CTR |
|---|---|---|
| Trigger | Suspicious activity | Cash transaction over $10,000 |
| Threshold | $5,000+ (broker-dealers) | $10,000+ (cash) |
| Filed with | FinCEN | FinCEN |
| Filing deadline | 30 days (60 if no suspect) | 15 days |
| Customer notification | PROHIBITED (no tipping off) | Customer may be aware |
| Requires suspicion? | Yes | No - mandatory for all qualifying cash transactions |
Exam Tip: Gotchas
The SAR threshold ($5,000) and CTR threshold ($10,000) are different numbers. The exam loves to test whether you can keep them straight. SARs require suspicion; CTRs are automatic for any cash transaction over $10,000.
Structuring (Smurfing)
- Structuring is the deliberate breaking up of cash transactions to avoid the $10,000 CTR reporting threshold
- Also called "smurfing" because it often involves using multiple people ("smurfs") to make smaller deposits
- Structuring is illegal even if the underlying funds are legitimate
- If a firm detects structuring, it must file a SAR (not just a CTR)
- Example: A customer deposits $9,500 in cash on Monday, then $9,500 on Tuesday, specifically to avoid the $10,000 threshold
Exam Tip: Gotchas
Structuring itself is a crime; the customer does not need to be laundering money for structuring to be illegal. Breaking up deposits to avoid the $10,000 reporting threshold violates the law regardless of where the money came from. The firm must report structuring via a SAR.
Memory Aid: CTR = Cash over $10,000 (automatic). SAR = Suspicious over $5,000 (requires suspicion).