ACAMS CCAS Certified Cryptoasset Anti-Financial Crime Specialist Examination Exam Practice Test

The ultimate responsibility for risk oversight lies with the Board of Directors. Senior management and the board have the fiduciary and governance duty to ensure that an effective risk management framework, including AML/CFT controls and cryptoasset-specific risks, is in place and functioning properly.

The DFSA GEN Module and AML Module explicitly allocate the highest accountability for compliance and risk oversight to the Board of Directors, while first and second lines support implementation and oversight respectively. The Chief Risk Officer (CRO) supports risk management but the board maintains ultimate accountability.

Key extracts:

GEN Module, Chapter 5: “Responsibility for compliance lies with every member of senior management, with ultimate oversight by the Board.”

AML Module Section 1.2 & 4.1: “Senior management and Board must ensure appropriate systems and controls for AML/CFT risk management.”

FATF Recommendation 2 underscores that senior management and boards are accountable for effective AML governance【GEN/VER64/05-24: Chapter 5; AML/VER25/05-24: Sections 1.2, 4.1】.

Thus,Dis the correct answer.

DAOs are decentralized organizational structures where protocol governance and operational decisions are made collectively by token holders or participants rather than centralized management. This group voting and consensus determine how the protocol functions.

DAOs do not rely on traditional contracts (D) nor necessarily require ongoing human managerial control (A). They are not simply funds with boards voting (C) but represent decentralized governance mechanisms.

In the context of AML/CFT frameworks for cryptoassets, the investigation of transaction histories involves blockchain analysis tools to trace the flow of funds to and from crypto addresses. Specifically, it is essential to assess whether the addresses involved have had prior exposure to illicit activities such as known darknet marketplaces, ransomware payments, or sanctioned entities. This form of "address screening" helps identify potentially tainted cryptoassets.

The DFSA AML Module and associated guidance emphasize that transaction monitoring for cryptoassets requires analyzing the provenance of funds, not just ownership. While identifying the owner is part of customer due diligence (CDD), the transactional exposure itself reveals laundering risks embedded in the chain of transfers.

Extract from DFSA AML Module and COB Module on Crypto Business Rules:

"Transaction monitoring systems must include blockchain analysis to detect suspicious activity related to crypto tokens, including tracing transactions against known illicit sources."

"Enhanced due diligence (EDD) is required when a cryptoasset transaction involves addresses or wallets with a history of illicit activity."

"Risk-based approaches must integrate forensic review of transaction histories to assess financial crime risks in crypto asset transfers"【AML/VER25/05-24: Sections 6.3, 7.3, 13.3; COB/VER45/05-24: Sections 6.13, 15】.

Therefore, assessing the receiving exposure of cryptoasset addresses to illicit activity (Option C) is the most direct and effective method to detect laundering.

Privacy coins like Monero use cryptographic features to obscure transaction details, increasing AML risk and regulatory scrutiny.

An effective AML CDD program must include:

Staff training on gathering CDD (A)

Maintaining complete information to support risk profiling (B)

Procedures to address situations where the customer's true identity is unclear or questionable (F)

Annual client reviews (D) and IP address monitoring (E) may be part of broader AML controls but are not fundamental CDD requirements. Maintaining a list of high-risk virtual assets (C) is important but relates more to product risk management than direct CDD.

Ongoing monitoring is the continuous analysis of customer activity to detect unusual or suspicious patterns over time.

Enhanced international cooperation in VA crime investigations is most effective when jurisdictions designate and empower Financial Intelligence Units (FIUs) that can share intelligence, coordinate cross-border investigations, and liaise with counterparts internationally.

While FATF membership (A) facilitates cooperation, the operational hub for investigations is the FIU. Establishing new agencies (B) or smart contracts for sharing (C) are not established or effective methods.

DFSA guidance and FATF recommendations stress the central role of FIUs in enhancing cooperation and intelligence sharing for AML/CFT, including virtual assets.

Upon identifying customer engagement with unhosted wallets or P2P transfers, the first step a VASP should take is tocollect and assess dataon such transactions. This assessment helps determine if these activities fall within the firm's risk appetite and what enhanced controls or actions may be needed.

Immediate account freezing (B) is not the first step without assessment; neither is allowing transfers (A) without risk consideration. Enhancing risk frameworks (D) is important but follows from an initial data-driven risk assessment.

Relevant guidance:

FATF Recommendations and DFSA AML Module require VASPs to maintain a risk-based approach that begins with data collection and risk assessment on unhosted wallet transactions.

The DFSA’s 2023 Dear MLRO letters and thematic reviews stress proportionality and evidence-based responses rather than immediate punitive measures.

Enhanced due diligence (EDD) and risk mitigation measures, including potentially freezing accounts, come after assessment of the risk level【AML/VER25/05-24: Sections 4.1, 6.4, 13; 20230406Dear_MLRO_Letter_re_IEMS.pdf】.

Hence,Cis the appropriate first action.

In risk-based AML/CFT programs — including those applied to Virtual Asset Service Providers (VASPs) — risk assessment determines the remaining exposure after applying mitigating measures.

Inherent Risk:The natural level of risk before applying any controls, based on factors like customer profile, transaction patterns, and jurisdiction.

Control Effectiveness:The degree to which implemented controls (e.g., CDD, EDD, sanctions screening, blockchain analytics) reduce risk.

Residual Risk:The risk that remains after controls are applied and is the level an organization must either accept, reduce further, or avoid.

The standard formula is:

Inherent Risk – Control Effectiveness = Residual Risk

This equation is emphasized in FATF’s risk-based approach guidance and reinforced in DIFC (DFSA) and ADGM (FSRA) AML rules to ensure ongoing monitoring and governance oversight of remaining risks.

Management must consider a comprehensive set of features when evaluating virtual asset products and services, including:

Ability for other VASPs to utilize the service (A):This increases risk exposure as services may be used indirectly by unknown parties.

Ability to mingle funds within wider pools (B):Mixing services or pooled wallets increase anonymity and laundering risk.

Regulatory expectations (C):Management must ensure compliance with all applicable laws and guidelines.

Transaction volumes (D):High transaction volumes can increase operational risk and require enhanced monitoring.

The DFSA AML and COB Modules, as well as FATF guidance, stress that a risk-based approach requires consideration of all these features in product/service risk assessments.

FATF guidance sets the threshold for Customer Due Diligence (CDD) on occasional transactions at USD/EUR 10,000 or equivalent. This means that when a cryptoasset exchange processes a one-off transaction exceeding this amount, it must apply appropriate CDD measures.

This aligns with FATF Recommendation 10 and is adopted by DFSA and FSRA frameworks governing virtual asset service providers, ensuring transactions over this limit are subject to identity verification and risk assessment.

Extracts from AML and COB modules emphasize this threshold as the trigger for CDD on occasional transactions to prevent laundering through high-value single transfers.

The most critical information enabling FIUs to address anonymity risks is data linking a virtual address to the real-world identity of its owner. Without this association, blockchain addresses remain pseudonymous, hindering effective AML efforts.

While transaction timing (A), identity of receiver (B), and transaction-to-address mapping (C) are useful, ownership linkage (D) is essential to break anonymity.

FATF and DFSA guidance prioritize obtaining ownership information through KYC and intelligence sharing.

FATF standards specify that Virtual Asset Service Providers (VASPs) must keep records related to transactions and customer due diligence for at least 5 years after the completion of the transaction or end of the business relationship. This retention period facilitates effective AML investigations and regulatory reviews.

DFSA AML Module aligns with this timeframe, reinforcing that comprehensive record retention supports audit trails and compliance verification.

Criminals often move cryptoassets through multiple intermediary wallets (many “hops”) rapidly to obfuscate the transaction trail and avoid clustering, which blockchain analytics use to link related addresses.

Simply receiving large amounts (A), holding assets (B), or splitting movements (D) are less effective at preventing clustering.

On-chain forensic analysis uses blockchain data to detect illicit wallet patterns and cluster associations.

Bitcoin and Ethereum have fundamental differences important to investigators:

Variety of applications, assets, and networks (B): Ethereum supports diverse decentralized applications (dApps), multiple tokens (ERC-20, ERC-721), and various networks, complicating transaction tracing compared to Bitcoin’s primary use as a cryptocurrency.

Ledger model (D): Ethereum uses an account-based ledger model, while Bitcoin uses a UTXO (unspent transaction output) model, affecting how transactions are recorded and analyzed.

Transaction cost (A) and address length (C) differ but are less relevant for fund flow investigations.

The Travel Rule, part of FATF Recommendation 16, requires VASPs to share sender and recipient information for virtual asset transfers above USD/EUR 1,000. The aim is to enable tracing and detection of illicit funds.

A 51% attack refers to a situation where a single miner or group controls more than 50% of the blockchain network’s computational (hashing) power. This majority control allows them to manipulate the blockchain ledger by double-spending or blocking transactions.

This term is widely recognized in blockchain security contexts and is referenced in typology papers on crypto financial crime risks, including those issued by UAE authorities and FATF.

Supporting extracts:

DFSA AML thematic reviews mention the risk of manipulation and double spending in blockchains susceptible to 51% attacks.

Typology reports on cryptoasset risks highlight computational power concentration as a core vulnerability.

“51% refers to the percentage of total mining power or computational power in the network” is the standard definition across crypto AML/CFT frameworks【31.92._TFS_Typology_Paper_Eng__4.pdf; AMLCFT_Guidance_for_FIs.pdf】.

Thus,Cis correct.

The main red flag is the customer’s failure to cooperate with requests to provide information on the origin of funds, which undermines transparency and raises suspicion regarding the legitimacy of the funds.

While an unconnected IP address (D) is suspicious, non-cooperation (C) is a stronger indicator of potential money laundering.

Consortium blockchains are semi-private networks where governance is shared among authorized participants, offering a balance between decentralization and access control.

Code uniqueness is critical because reuse or replication of vulnerable code exposes protocols to known exploits. Unique, well-audited, and secure code minimizes compromise risk in decentralized finance (DeFi) and smart contracts.

Security standards (A), authentication (B), and regulation (C) are important but secondary to the fundamental security of the code itself.

The EU’s Markets in Crypto-Assets Regulation (MICA) applies specifically to:

Electronic Money Tokens (B): Tokens that fulfill the definition of electronic money under the E-Money Directive.

Cryptoassets (D): Broad category including digital representations of value that are not covered by existing financial services legislation.

Asset-Referenced Tokens (E): Tokens that purport to maintain a stable value by referencing one or several assets.

Meme coins (A) and privacy coins (C) are not separately classified under MICA but may fall under broader cryptoasset categories subject to other regulations.

EDD and internal review determine whether the activity is suspicious before regulatory reporting or freezing actions.

Integration is the final stage of money laundering, where illicit funds re-enter the economy appearing legitimate — e.g., converting crypto into fiat via exchanges or buying assets.

Public blockchain data is pseudonymous, meaning wallet addresses alone do not reveal the owner’s identity. To identify the natural person controlling the wallet, the VASP must acquire additional information, typically through customer due diligence (CDD) processes or data obtained from exchanges and counterparties, linking the wallet address to an individual.

Periodic review (A), transaction screening (C), and obtaining transactional data (D) support ongoing monitoring but do not alone establish identity.

AML and FATF guidance emphasize that ownership linkage requires collecting identifying information beyond blockchain data to comply with AML regulations.

CDD includes verifying the customer’s identity using reliable, independent documentation before or during onboarding.

Proof of Work (PoW) consensus achieves network consensus by requiring participants (miners) to solve complex cryptographic puzzles, which verifies transactions and secures the blockchain. This computational work makes it difficult and costly to alter the blockchain.

Dependency on electricity (A) is a criticism rather than an advantage. PoW promotes decentralization rather than centralization (B). It provides strong security for large networks rather than small ones (D).

This principle is fundamental in Bitcoin and many other cryptocurrencies and is frequently referenced in AML/CFT guidance to understand the transaction validation process and network security.

A token burn is the deliberate removal of tokens from circulation by sending them to an unspendable address. While sometimes legitimate, burns can also be misused for market manipulation.

Decentralized exchanges lack a central counterparty responsible for AML compliance, making it difficult to enforce KYC/CDD, monitor transactions, or implement controls. This structural characteristic increases inherent AML risk compared to centralized exchanges, which have accountable operators.

Transaction cost (A), validator nodes (B), or asset types (D) are less impactful in the compliance risk rating.

Monero is a privacy-focused blockchain designed with built-in features like ring signatures, stealth addresses, and confidential transactions to obfuscate sender, receiver, and transaction amounts, making tracing difficult.

Cardano, Polygon, and Ethereum are not designed primarily with these privacy features and have publicly traceable ledgers, although privacy solutions may be layered on.