CCA Anti-Money Laundering & Financial Crime in Crypto 2

Question 1

Which red flag is most indicative of potential structuring (smurfing) activity on a cryptocurrency exchange?

Accepted Answer

Multiple deposits just below the $10,000 CTR threshold from the same customer across consecutive days

Answer

Multiple deposits just below the CTR threshold from the same customer is the textbook definition of structuring, which is illegal under 31 U.S.C. § 5324 regardless of whether the underlying funds are licit.

Question 2

A blockchain analytics tool assigns a cryptocurrency transaction a 'risk score' of 85/100 based on exposure to darknet markets. What is the appropriate auditor response when reviewing a VASP's transaction monitoring program?

Accepted Answer

Verify that the VASP has a documented procedure for investigating high-risk-scored transactions and filing SARs when appropriate

Answer

A high risk score triggers a review obligation — the auditor should verify the VASP has documented investigation procedures and appropriate SAR filing protocols, as the score is a flag requiring human investigation, not automatic proof of wrongdoing.

Question 3

Under FinCEN guidance, cryptocurrency exchanges operating as MSBs must retain records of customer identity verification for a minimum of how many years?

Accepted Answer

5 years

Answer

The BSA requires MSBs, including cryptocurrency exchanges, to retain customer identification records, transaction records, and SARs for a minimum of 5 years from the date the record was created.

Question 4

Privacy coins like Monero use which technology to make transaction tracing significantly more difficult than standard Bitcoin transactions?

Accepted Answer

Ring signatures, stealth addresses, and RingCT that obscure sender, receiver, and amount simultaneously

Answer

Monero combines ring signatures (obscuring the true sender), stealth addresses (one-time recipient addresses), and RingCT (hiding transaction amounts), making all three transaction elements — who, to whom, and how much — opaque by default.

Question 5

What is the primary AML concern with peer-to-peer (P2P) cryptocurrency trading platforms that operate without KYC requirements?

Accepted Answer

They can be used to exchange illicit cryptocurrency for cash without identity verification, effectively acting as unregistered money transmitters

Answer

KYC-free P2P platforms allow users to convert illicit cryptocurrency to cash with no identity records created, functioning as unregistered money transmission services and providing a critical off-ramp for money launderers.

(CCA) Certified Cryptocurrency Auditor Practice Test

(CCA) Certified Cryptocurrency Auditor Practice Test

CCA Anti-Money Laundering & Financial Crime in Crypto 2