Suspicious activity reports (SARs)

The SARs, refer as Suspicious Activity Reports, are partial information that warns law enforcement that some customer/client activities are suspicious and may indicate money laundering or terrorist financing.

Financial institutions subject to the Bank Secrecy Act (BSA) regulations are required to submit Suspicious Activity Reports (SARs) to report any known or suspected violations of law or suspicious activities. SARs have proven invaluable tools for law enforcement agencies in initiating or supplementing significant investigations related to money laundering, terrorist financing, and other criminal cases. Additionally, the information in SAR forms enables the Financial Crimes Enforcement Network (FinCEN) to identify emerging trends and patterns associated with financial crimes, providing valuable feedback to financial institutions and law enforcement agencies.

However, some financial institutions submit incomplete, incorrect, or disorganized SAR forms, which hinders further analysis and makes it difficult for law enforcement to determine whether a crime has been committed or to what extent. Blank narratives or inadequate descriptions of suspicious activities also undermine the effectiveness of SARs. Therefore, financial institutions must ensure that SAR forms are complete, sufficient, and timely filed. The narratives in SAR forms are the only free text area for summarizing suspicious activity, so it is essential that they are clear, concise, and thorough.

Following the statement, Financial institutions and and VASPs must file a suspicious activity report within 30 calendar days from the date of initial detection of facts that may be the basis for filing a suspicious activity report. If the suspect is not identified on the date of detection of the incident, a prosecution must be filed. Financial institutions may postpone the filing of suspicious activity reports by 30 calendar days to identify the suspects. in any case Reporting must be delayed more than 60 calendar days after the date of the first reported transaction detected. Late filings, absence of supplementary SARs, and inaccuracies in SARs can negatively impact law enforcement's ability to investigate and prosecute crimes, making it imperative for financial institutions to file complete and accurate SARs within established deadlines.

VASPs can use crypto transactions monitoring tools such as Scorechain's to detect potentially illegal activity and report it to the concerned authority.

Discover more about blockchain crypto and compliance with our Glossary.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.