CCI - Certified Cryptocurrency Investigator Illicit Cryptocurrency Schemes Questions and Answers

Question 1

An investigator is analyzing a new cryptocurrency project that promised revolutionary returns. The developers, who remained anonymous, aggressively promoted the token on social media, causing a massive price surge. They then suddenly drained the project's liquidity pool and disappeared, leaving investors with worthless tokens. Which illicit scheme does this scenario describe?

Accepted Answer

A rug pull

Answer

This scenario is a classic example of a rug pull, where developers abandon a project and run away with investors' funds. A key characteristic is the removal of liquidity by the project creators, making it impossible for investors to sell their tokens. While it has similarities to a pump-and-dump, the defining action in a rug pull is the developer's exit and liquidity drain, which is specific to the DeFi space.

Question 2

Which of the following is the primary purpose of a cryptocurrency mixer or tumbler in the context of illicit activities?

Accepted Answer

To obscure the transaction trail and launder illicit funds

Answer

Cryptocurrency mixers, also known as tumblers, are services that commingle cryptocurrencies from multiple users to break the link between the sender and receiver, thereby obscuring the transaction trail. This makes them a popular tool for money laundering and hiding the origin of funds obtained from criminal activities.

Question 3

A criminal organization receives a large sum of Bitcoin from illicit operations. To launder the funds, they use a cross-chain bridge to convert the Bitcoin to Monero, then swap the Monero for Tether on a different blockchain's DeFi protocol, and finally cash out through a centralized exchange. What is this money laundering technique called?

Accepted Answer

Chain hopping

Answer

Chain hopping is a money laundering technique that involves moving funds across different blockchains to obfuscate their origin. By using cross-chain bridges and decentralized exchanges to swap assets between chains (e.g., Bitcoin to Ethereum to Tron), criminals make it significantly more difficult for investigators to trace the flow of illicit funds.

Question 4

Which characteristic most accurately distinguishes a cryptocurrency pyramid scheme from a Ponzi scheme?

Accepted Answer

A pyramid scheme's structure requires participants to recruit new members to generate returns.

Answer

The defining feature of a pyramid scheme is its reliance on a hierarchical structure where participants earn money primarily by recruiting new members, who in turn must recruit others. In contrast, a Ponzi scheme is typically a centralized investment fraud where returns for earlier investors are paid using capital from newer investors, without the explicit requirement for investors to recruit others.

Question 5

An investigator is examining a case where a criminal group is using a specific type of cryptocurrency that utilizes ring signatures, stealth addresses, and RingCT to make transactions virtually untraceable by default. Which of the following cryptocurrencies is most likely being used?

Accepted Answer

Monero (XMR)

Answer

Monero (XMR) is a well-known privacy coin that implements several advanced cryptographic techniques to ensure anonymity. These include ring signatures to obscure the sender, stealth addresses to hide the receiver, and Ring Confidential Transactions (RingCT) to conceal the transaction amount, making every transaction private by default.

CCI - Certified Cryptocurrency Investigator Practice Test

CCI - Certified Cryptocurrency Investigator Practice Test

CCI - Certified Cryptocurrency Investigator Illicit Cryptocurrency Schemes Questions and Answers