Politically Exposed Person (PEP)
PEP typically stands for ‘Politically Exposed Person’, which refers to individuals who are or have been entrusted with prominent public functions, such as government officials, senior executives of state-owned corporations, or high-ranking military officers. The term can also include their immediate family members and close associates.
PEPs are considered higher-risk individuals in terms of potential involvement in corruption, money laundering, or other illicit activities due to their positions of influence and access to significant financial resources. As a result, financial institutions and cryptocurrency exchanges often have enhanced due diligence procedures for PEPs to mitigate these risks and ensure compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations.
Key Takeaway
Politically Exposed Person (PEP) refers to individuals who are or have been entrusted with prominent public functions, such as government officials, senior executives of state-owned corporations, or high-ranking military officers.