C4 Quality Assurance & Compliance 3

Question 1

A VASP must conduct Enhanced Due Diligence (EDD) on a customer. Which scenario most clearly triggers this requirement?

Accepted Answer

A customer is identified as a Politically Exposed Person (PEP)

Answer

Politically Exposed Persons (PEPs) pose higher corruption and bribery risks, triggering mandatory Enhanced Due Diligence under AML regulations worldwide.

Question 2

What is the primary purpose of a blockchain transaction's on-chain audit trail in a compliance investigation?

Accepted Answer

To provide immutable, timestamped records of fund flows

Answer

The immutable, public ledger of a blockchain creates an audit trail that compliance investigators can use to trace the origin and destination of funds across time.

Question 3

Under the SEC's Howey Test, which element must be present for a digital asset to be classified as a security?

Accepted Answer

Profits must be expected primarily from the efforts of others

Answer

The Howey Test requires an investment of money in a common enterprise with an expectation of profits derived primarily from the efforts of a third party for something to qualify as a security.

Question 4

A crypto firm's compliance officer receives a National Security Letter (NSL). What is the typical legal constraint associated with an NSL?

Accepted Answer

It comes with a gag order prohibiting disclosure

Answer

NSLs typically include a non-disclosure (gag) order that prohibits the recipient from revealing that the letter was received, even to legal counsel in some cases.

Question 5

Which compliance framework specifically governs the security of payment card data that may be processed by crypto platforms accepting card payments?

Accepted Answer

PCI DSS

Answer

PCI DSS (Payment Card Industry Data Security Standard) applies to any entity that stores, processes, or transmits cardholder data, including crypto platforms accepting card purchases.

(C4) CryptoCurrency Certification Consortium Practice Test

(C4) CryptoCurrency Certification Consortium Practice Test

C4 Quality Assurance & Compliance 3