Financial Crime Prevention Flashcards
7 cards from real CCB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Crime Prevention flashcards as text
Which emerging typology uses digital assets to layer illicit funds by rapidly exchanging between multiple cryptocurrencies across decentralized exchanges?
Answer: Chain-hopping
Chain-hopping involves converting cryptocurrency from one blockchain to another in rapid succession to obscure the transaction trail.
A compliance program that relies solely on automated transaction monitoring without human review is MOST deficient in which area?
Answer: Contextual analysis and judgment
Automated systems lack the contextual judgment needed to evaluate complex customer relationships and emerging typologies, requiring human analyst review.
Under the Corporate Transparency Act (CTA), which entity type is generally EXEMPT from beneficial ownership reporting requirements to FinCEN?
Answer: SEC-reporting public companies
SEC-reporting public companies are among the 23 exempted categories under the CTA because they already disclose ownership information to regulators.
Which real estate-related AML requirement requires title insurance companies in certain high-risk areas to identify the natural persons behind shell companies purchasing high-value properties?
Answer: Geographic Targeting Orders (GTOs)
FinCEN's Geographic Targeting Orders require title insurance companies in specific US markets to identify beneficial owners of LLCs purchasing residential real estate above certain thresholds.
The 'risk-based approach' to AML compliance means that a financial institution should:
Answer: Allocate more compliance resources to higher-risk customers and activities
A risk-based approach requires institutions to direct enhanced scrutiny and resources proportionally toward customers, products, and geographies that pose the greatest financial crime risk.
Which internal control practice is MOST effective at detecting collusion between employees to facilitate money laundering?
Answer: Job rotation and mandatory vacation policies
Mandatory vacations and job rotation force another employee to cover responsibilities, increasing the likelihood of detecting concealed schemes or unusual activity.
A SAR filed with FinCEN is subject to strict confidentiality rules. Which of the following actions would VIOLATE these rules?
Answer: Disclosing the SAR to the subject of the report
Disclosing the existence or content of a SAR to the subject ('tipping off') is explicitly prohibited under 31 USC 5318(g) and may result in criminal penalties.