Wise Test Wise Compliance and Regulation 2 — Questions and Answers
Question 1: Under which US regulatory framework is Wise required to register as a Money Services Business (MSB)?
- Securities Exchange Act
- Bank Secrecy Act (Correct answer)
- Dodd-Frank Act
- Gramm-Leach-Bliley Act
Correct answer: Bank Secrecy Act
The Bank Secrecy Act (BSA) requires Wise and similar money transmitters to register as MSBs with FinCEN.
Question 2: Which agency must Wise register with at the federal level to operate as a money services business in the US?
- FDIC
- OCC
- FinCEN (Correct answer)
- CFPB
Correct answer: FinCEN
FinCEN (Financial Crimes Enforcement Network) is the federal agency where MSBs like Wise must register.
Question 3: When Wise detects a potentially suspicious transaction, what is the primary compliance obligation?
- Freeze the customer account immediately
- File a Suspicious Activity Report (SAR) (Correct answer)
- Contact local law enforcement directly
- Refund the transaction to the sender
Correct answer: File a Suspicious Activity Report (SAR)
Filing a Suspicious Activity Report (SAR) with FinCEN is the required compliance step when a suspicious transaction is detected.
Question 4: What does the Customer Identification Program (CIP) require Wise to collect at minimum when onboarding a US customer?
- Only name and email address
- Name, date of birth, address, and identification number (Correct answer)
- Social security number and bank account number
- Employer name and annual income
Correct answer: Name, date of birth, address, and identification number
CIP requires collection of name, date of birth, address, and an identification number (e.g., SSN or passport number) for each new customer.
Question 5: Wise's obligation to screen customers against government-issued sanctions lists is governed primarily by which US authority?
- FBI
- OFAC (Correct answer)
- SEC
- FTC
Correct answer: OFAC
OFAC (Office of Foreign Assets Control) administers sanctions programs that require Wise to screen all transactions and customers.
Question 6: What is the minimum threshold for filing a Currency Transaction Report (CTR) under US BSA regulations?
- $5,000
- $7,500
- $10,000 (Correct answer)
- $25,000
Correct answer: $10,000
Financial institutions must file a CTR for any cash transaction exceeding $10,000 in a single business day.
Question 7: What is 'structuring' in the context of Wise compliance, and why is it illegal?
- Organizing transactions by currency type to simplify reporting
- Breaking large transactions into smaller ones to evade CTR reporting requirements (Correct answer)
- Structuring fees to maximize revenue on transfers
- Creating layered ownership of a Wise account
Correct answer: Breaking large transactions into smaller ones to evade CTR reporting requirements
Structuring (smurfing) is deliberately splitting transactions to stay below the $10,000 CTR threshold, which is a federal crime under 31 U.S.C. § 5324.
Wise Test Wise Compliance and Regulation 2
Under which US regulatory framework is Wise required to register as a Money Services Business (MSB)?