What is the purpose of a Currency Transaction Report (CTR)?

The purpose of a Currency Transaction Report (CTR) is primarily to report transactions that may be linked to money laundering. Financial institutions are required to file a CTR for certain cash transactions that exceed a specified threshold, usually $10,000. This requirement is part of efforts to prevent and detect money laundering and other financial crimes. The information provided in these reports helps authorities monitor large cash movements that could indicate illegal activities, enabling them to investigate potential money laundering schemes.

The emphasis on reporting transactions specifically helps regulatory bodies identify suspicious patterns of behavior that might not be apparent from individual transactions alone. By aggregating transaction data and analyzing it, law enforcement can better assess the risk posed by certain financial activities.

In contrast, while client risks, income verification, or classification of deposits are related to customer due diligence and financial assessment, they do not directly capture the primary role of the CTR within the broader framework of fraud prevention and compliance with anti-money laundering regulations.