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.
