Final answer:
A SAR is filed when there's a suspicion of illicit activity involving at least $5,000, while a CTR is mandated for any currency transaction over $10,000, regardless of its nature. SARs are related to potential criminal activity, unlike CTRs, which are triggered solely by the transaction amount.
Step-by-step explanation:
The threshold for triggering suspicious activity that is grounds for filing a Suspicious Activity Report (SAR) differs from the threshold for a Currency Transaction Report (CTR). A SAR must be filed when a financial institution detects any known or suspected federal violation of law or suspicious transaction related to money laundering or fraud. This includes transactions that aggregate to at least $5,000 and involve potential use of the financial institution to facilitate criminal activity.
In contrast, a CTR is filed for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to a financial institution which involves a transaction in currency of more than $10,000. It is important to note that while SAR filing is based on a suspicion of illicit activities, the CTR is purely based on the transaction amount, regardless of the nature of the transaction.