How to handle suspicious transactions: A complete guide for crypto companies

When the U.S. Financial Crimes Enforcement Network (FinCEN) released guidance FIN-2019-A003 in May 2019, the agency specifically highlighted seven categories of cryptocurrency-related data considered especially useful for financial crime investigations.

Seven years later, banks, crypto exchanges, and digital asset firms are still trying to figure out how to collect this information quickly and consistently as part of their suspicious activity monitoring programs.

At first glance, cryptocurrencies should actually be easier to track than traditional bank transfers. Blockchain networks provide a public and permanent record of every transaction. The challenge is different: it’s not enough to simply see the data. Companies must determine which transactions are genuinely suspicious and turn massive amounts of technical information into reports that regulators can understand and investigators can use effectively.

GetBlock AML Research explains what an effective crypto suspicious activity report should look like.

What Is a Crypto SAR?

A crypto SAR (Suspicious Activity Report) is a special report used to flag suspicious cryptocurrency-related activity. In the United States, these reports are filed with FinCEN. In the UK, they are submitted to the UK Financial Intelligence Unit (UKFIU), which operates under the National Crime Agency.

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While regulations vary by country, the overall principle remains the same: financial institutions are required to report transactions potentially linked to fraud, money laundering, terrorist financing, or other illegal activity.

In the U.S., crypto SAR filing rules are formally similar to those used in traditional banking. Companies must submit a report within 30 days after detecting suspicious activity. If suspects cannot immediately be identified, the deadline may be extended to 60 days.

There are also reporting thresholds:

• if a suspicious transaction exceeds $5,000 and specific individuals can be identified;
• or if the amount exceeds $25,000 but no suspects have yet been identified.

In practice, however, crypto SARs differ significantly from traditional banking reports.

The reason is simple: standard SAR frameworks were designed for the banking system, not blockchain networks. In crypto cases, regulators expect far more technical details related to wallets, transactions, and online user behavior.

What a Crypto SAR Should Include

In FIN-2019-A003, FinCEN outlined seven categories of data that are particularly valuable for law enforcement.

These include:

• cryptocurrency wallet addresses;
• account details;
• transaction data, including unique transaction IDs;
• transaction history;
• IP addresses and login information;
• mobile device identifiers;
• information gathered through analysis of a customer’s online activity.

However, the list is not considered exhaustive.

U.S. regulators specifically emphasize that financial institutions should provide “all available and relevant information” that could assist an investigation. The goal of a SAR is not simply to list technical details, but to connect them into a clear and understandable narrative.

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Investigators should be able to determine:

• who participated in the transaction;
• why the activity appears suspicious;
• what risk indicators were identified;
• how the customer’s behavior differs from their normal activity;
• whether the funds are directly or indirectly connected to sanctioned wallets, darknet markets, crypto mixers, or other high-risk services.

At the same time, overly technical language can also become a problem. A strong crypto SAR should support investigations, not overwhelm investigators with jargon.

Why Regulators Are Increasingly Focused on Effectiveness

In recent years, U.S. authorities have begun changing their approach to financial oversight. On April 7, 2026, FinCEN proposed reforms to AML/CFT programs — anti-money laundering and counter-terrorist financing systems operating under the Bank Secrecy Act.

The key idea behind the reform is shifting from formal compliance toward actual investigative effectiveness.

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In other words, regulators want companies to do more than file reports just to satisfy compliance requirements. They want firms to help identify serious criminal activity and provide meaningful intelligence to law enforcement.

At the time of publication, the proposal remains under public review, which continues through June 9, 2026. Still, the direction is already clear: regulators care less about the sheer number of reports submitted and more about the quality of analysis and practical value of the information provided.

The Most Common Mistakes Companies Make

One of the biggest problems in the market is that many organizations begin treating almost every crypto transaction as suspicious. As a result, authorities receive thousands of reports that contain little or no evidence of illegal activity.

This creates enormous amounts of “noise” for investigators and makes it harder to identify genuinely dangerous transactions.

Another common issue is vague reporting. A company may suggest suspicious behavior without clearly explaining why the activity is risky or how it differs from a customer’s normal behavior.

In some cases, problems arise after the initial report is filed.

A company may submit an initial SAR but fail to update it even after new suspicious transactions linked to the same wallet or address cluster appear on-chain.

Reports also frequently lack critical details such as the origin of funds, counterparty information, or connections between transactions.

Most of these problems stem from the same root cause: the absence of a systematic approach to blockchain analytics and large-scale data analysis.

How Blockchain Analytics Is Changing Investigations

Modern blockchain analytics systems can turn chaotic crypto transaction data into structured intelligence suitable for investigations.

Simply put, these tools do more than display transfers — they help determine who is behind the movement of funds and how risky a specific transaction may be.

Blockchain analytics platforms can:

• trace the origin of funds;
• identify links to sanctioned addresses;
• detect connections to darknet activity or fraud schemes;
• analyze user behavior patterns;
• correlate transactions across multiple blockchains.

In practice, this significantly reduces false positives and allows compliance teams to focus on truly high-risk activity. Automated analysis also dramatically speeds up the work of financial monitoring specialists.

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In the past, reviewing a complex crypto transaction chain could take hours. Today, modern systems can perform an initial risk assessment in just minutes. This is especially important for large exchanges and banks processing millions of transactions every day.

Why Report Quality Is Becoming Critical

A poorly prepared crypto SAR usually reads like a collection of generic statements with little useful detail.

But when a company can clearly demonstrate:

• the path of fund movement;
• connections between wallets;
• the origin of assets;
• interactions with high-risk services;
• customer behavioral anomalies,

the report becomes a solid foundation for a financial investigation.

Today, many investigations are built around exactly this type of data. Once a SAR is filed, the information does not simply disappear into a bureaucratic system. It often becomes the starting point for government investigations.

Authorities use these reports to trace fund flows, connect separate criminal cases, and identify opportunities to freeze or seize assets. Well-structured data plays an especially important role when analyzing large datasets.

A single report may describe only one customer’s activity. But when hundreds or thousands of SARs are analyzed together, hidden connections between fraud networks, crypto schemes, and international criminal organizations can begin to emerge.

That is why crypto financial monitoring is steadily becoming one of the most important tools in the modern fight against financial crime.