CCA Cryptocurrency Transaction Auditing Questions and Answers

Question 1

An auditor is analyzing a series of transactions on the Bitcoin blockchain and notices a pattern where a large input is broken down, with a small amount sent to one address and the larger remaining balance sent to a new 'change' address controlled by the original sender.
This process is repeated multiple times.
What is this specific transaction pattern called?

Accepted Answer

Peel Chain

Answer

Smurfing

Answer

Chain Hopping

Answer

Layering

Question 2

During a compliance audit of a virtual asset service provider (VASP), an auditor is required to verify that the VASP is screening transactions against sanctioned cryptocurrency addresses. Which U.S. government agency's list is the most critical for this specific compliance check?

Accepted Answer

Office of Foreign Assets Control (OFAC)

Answer

Financial Crimes Enforcement Network (FinCEN)

Answer

Securities and Exchange Commission (SEC)

Answer

Internal Revenue Service (IRS)

Question 3

A Certified Cryptocurrency Auditor is tasked with verifying the existence and ownership of Bitcoin for a client. The client provides a list of their public addresses. What is the most effective procedure to confirm the client has control over the private keys associated with these addresses?

Accepted Answer

Requesting the client to sign a specific message with their private key.

Answer

Analyzing the transaction history for large incoming transfers.

Answer

Using a block explorer to confirm the balance of each address.

Answer

Reviewing the client's wallet software and hardware configuration.

Question 4

Which of the following is a primary audit challenge specifically associated with cryptocurrencies that use the Unspent Transaction Output (UTXO) model, like Bitcoin?

Accepted Answer

Aggregating total holdings from numerous individual outputs.

Answer

Reconciling account balances from a central ledger.

Answer

Verifying the execution of complex smart contract logic.

Answer

Auditing for gas fees and transaction throughput.

Question 5

An auditor is reviewing a company's crypto transactions and identifies several transfers sent to a service that pools funds from multiple users, mixes them together, and then sends them to new destination addresses to obscure the on-chain trail. This activity is a significant red flag for what type of illicit activity?

Accepted Answer

Money laundering

Answer

Insider trading

Answer

Market manipulation

Answer

Pump and dump schemes

Question 6

When auditing a decentralized finance (DeFi) protocol, what is the primary focus of a smart contract audit?

Accepted Answer

Analyzing the code for security vulnerabilities and logical errors.

Answer

Assessing the fair market value of the protocol's native token.

Answer

Reviewing the protocol's marketing materials for accuracy.

Answer

Evaluating the KYC/AML procedures for the protocol's users.