ACAMS Virtual Assets and Cryptocurrency AML 2

Question 1

Which of the following is a primary red flag indicator of potential money laundering in cryptocurrency transactions?

Accepted Answer

Multiple small cryptocurrency purchases that aggregate just below reporting thresholds

Answer

A customer who consistently uses the same wallet address for all purchases

Answer

A customer who requests a paper statement of their crypto holdings

Answer

Transactions conducted during standard business hours in the customer's time zone

Question 2

What are 'privacy coins' such as Monero (XMR) and Zcash (ZEC), and why are they of heightened concern for AML compliance?

Accepted Answer

Cryptocurrencies that use cryptographic techniques to obscure transaction amounts, sender, and receiver addresses

Answer

Coins backed by physical gold that make transaction values unpredictable

Answer

Stablecoins that automatically convert to fiat at regulatory thresholds

Answer

Tokens that require multi-signature approval, slowing down transaction monitoring

Question 3

In a decentralized exchange (DEX), what is the primary AML compliance challenge compared to a centralized exchange (CEX)?

Accepted Answer

DEXs typically operate without a central operator to collect KYC data or file SARs

Answer

DEXs charge higher transaction fees that complicate fund tracking

Answer

DEXs are only available in non-sanctioned jurisdictions

Answer

DEX transactions are too slow to be useful for money laundering

Question 4

What is 'dusting' in the context of cryptocurrency, and how can it relate to AML concerns?

Accepted Answer

Sending microscopic amounts of crypto to multiple wallets to de-anonymize their owners by tracking subsequent transactions

Answer

Disposing of unwanted cryptocurrency by sending it to a burn address

Answer

Dividing cryptocurrency into tiny amounts to avoid exchange minimum thresholds

Answer

A method of encrypting wallet keys using quantum-resistant algorithms

Question 5

Which approach do blockchain analytics firms (e.g., Chainalysis, Elliptic) primarily use to link cryptocurrency wallet addresses to real-world entities?

Accepted Answer

Clustering wallet addresses based on shared inputs and known exchange deposit patterns

Answer

Accessing private keys stored on cryptocurrency exchanges

Answer

Monitoring social media for public wallet address disclosures

Answer

Reviewing tax filings submitted by cryptocurrency holders

Question 6

Non-Fungible Tokens (NFTs) present a money laundering risk primarily through which mechanism?

Accepted Answer

Wash trading — selling NFTs to oneself at inflated prices to layer illicit funds

Answer

NFTs can be secretly converted to fiat currency without triggering reporting

Answer

NFTs are exempt from AML regulations in all jurisdictions

Answer

NFT platforms do not require internet connectivity, avoiding transaction records

Question 7

What does the term 'unhosted wallet' (also called 'self-hosted' or 'non-custodial wallet') mean in the context of VASP regulation?

Accepted Answer

A cryptocurrency wallet controlled directly by the user without a third-party custodian

Answer

A wallet hosted on a regulated exchange that the user cannot directly access

Answer

A shared wallet used by multiple businesses under a single compliance program

Answer

A wallet that has been frozen by a government authority pending investigation