CCA Anti-Money Laundering & Financial Crime in Crypto 3

Question 1

Which of the following best describes the 'integration' stage of money laundering in a cryptocurrency context?

Accepted Answer

Using laundered cryptocurrency to purchase luxury goods, real estate, or legitimate business interests that appear to have a clean origin

Answer

Integration is the final stage where now-'cleaned' funds are re-introduced into the legitimate economy through purchases or investments that give the funds a legitimate-seeming origin, completing the laundering cycle.

Question 2

A Suspicious Activity Report (SAR) filed by a cryptocurrency exchange must be submitted to which regulatory body?

Accepted Answer

FinCEN (Financial Crimes Enforcement Network)

Answer

SARs are submitted to FinCEN, the Treasury Department bureau responsible for administering the Bank Secrecy Act and serving as the primary U.S. financial intelligence unit.

Question 3

When auditing a crypto exchange's AML program, what is the significance of the 'risk-based approach' mandated by FinCEN and FATF?

Accepted Answer

Exchanges must allocate AML compliance resources proportionally to the level of money laundering risk posed by their products, customers, and geographies

Answer

The risk-based approach requires VASPs to identify, assess, and understand their specific ML/TF risks and then apply enhanced controls where risks are higher and simplified controls where risks are lower, rather than a one-size-fits-all approach.

Question 4

Which on-chain indicator is a common red flag for NFT-based money laundering known as 'wash trading'?

Accepted Answer

The same NFT being bought and sold multiple times between wallets that are funded from the same source address

Answer

When the same NFT cycles between wallets that can be traced back to a common funding source, it indicates the same economic actor is trading with themselves to manufacture artificial transaction history and inflate apparent value.

Question 5

Under the BSA, which cryptocurrency business activity generally requires FinCEN MSB registration?

Accepted Answer

Operating as a cryptocurrency exchanger by accepting and transmitting virtual currency as a business

Answer

FinCEN's 2013 guidance classifies cryptocurrency exchangers — entities that exchange virtual currency for real currency, funds, or other virtual currency as a business — as money transmitters requiring MSB registration.

(CCA) Certified Cryptocurrency Auditor Practice Test

(CCA) Certified Cryptocurrency Auditor Practice Test

CCA Anti-Money Laundering & Financial Crime in Crypto 3