Cryptocurrency Regulation and Compliance 5

Question 1

A US crypto exchange discovers a customer is on OFAC's Specially Designated Nationals (SDN) list. What must it do?

Accepted Answer

Block the transaction and report to OFAC within 10 days

Answer

When a match with an SDN is found, exchanges must block the transaction and any associated funds, then file a blocked property report with OFAC.

Question 2

Under the Infrastructure Investment and Jobs Act (2021), which new crypto reporting requirement was introduced?

Accepted Answer

Crypto brokers must report customer transactions to the IRS on Form 1099

Answer

The 2021 Infrastructure Act expanded the definition of 'broker' to include crypto platforms, requiring them to report user transactions to the IRS.

Question 3

What is the primary purpose of a crypto exchange's AML compliance program?

Accepted Answer

To detect, prevent, and report money laundering and terrorist financing

Answer

AML programs are legally required to identify and prevent the use of crypto platforms for laundering illicit funds or financing terrorism.

Question 4

What was the outcome of the FTX collapse regarding crypto regulation in the US?

Accepted Answer

It intensified calls for stronger regulation and led to increased enforcement actions

Answer

FTX's $8 billion fraud accelerated congressional and regulatory focus on crypto oversight, leading to more enforcement actions and regulatory proposals.

Question 5

Which of the following activities would MOST likely cause a crypto exchange to file a Suspicious Activity Report (SAR)?

Accepted Answer

A customer repeatedly transacting just below $10,000 with no clear business purpose

Answer

Repeated transactions just below reporting thresholds (structuring) is a classic red flag that triggers SAR filing obligations.

Cryptocurrency Practice Test

Cryptocurrency Practice Test

Cryptocurrency Regulation and Compliance 5