CCI Cryptocurrency Exchange Investigations 2

Question 1

What is an address 'cluster' in the context of blockchain exchange investigations?

Accepted Answer

A group of addresses identified as controlled by the same entity through heuristics like common-input ownership

Answer

A cluster is a group of cryptocurrency addresses attributed to the same controlling entity, most commonly identified through common-input-ownership heuristics.

Question 2

When investigating a cryptocurrency exchange, which legal instrument prevents the exchange from alerting the customer that their records are being sought?

Accepted Answer

Non-disclosure order (gag order) accompanying the subpoena

Answer

A non-disclosure order (gag order) accompanying a subpoena legally prohibits the exchange from notifying the account holder that their records are under investigation.

Question 3

What is 'smurfing' in the context of cryptocurrency exchange investigations?

Accepted Answer

Breaking large amounts into smaller transactions to stay below reporting thresholds

Answer

Smurfing is a structuring technique that breaks large amounts into smaller transactions specifically to avoid triggering mandatory reporting thresholds like the $10,000 CTR.

Question 4

Which US government agency maintains primary AML/KYC regulatory authority over domestic cryptocurrency exchanges?

Accepted Answer

FinCEN (Financial Crimes Enforcement Network)

Answer

FinCEN, a bureau of the US Treasury Department, holds primary AML/KYC regulatory authority over cryptocurrency exchanges registered as MSBs in the United States.

Question 5

What is a Suspicious Activity Report (SAR) and who is required to file it?

Accepted Answer

A confidential report filed by financial institutions including exchanges with FinCEN when suspicious activity is detected

Answer

A SAR is a confidential report that financial institutions (including crypto exchanges) must file with FinCEN when transactions suggest potential money laundering or other criminal activity.

CCI - Certified Cryptocurrency Investigator Practice Test

CCI - Certified Cryptocurrency Investigator Practice Test

CCI Cryptocurrency Exchange Investigations 2