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NEW QUESTION # 46
Which first step should a VASP take upon detecting repeated transactions to a high-risk wallet?
Answer: A
Explanation:
EDD and internal review determine whether the activity is suspicious before regulatory reporting or freezing actions.
NEW QUESTION # 47
A customer sends funds to multiple newly created wallets before cashing out via an exchange. This is an example of:
Answer: D
Explanation:
This process is layering, designed to hide the source of funds through multiple new wallets before integration into the financial system.
NEW QUESTION # 48
Which advantage of the proof of work consensus algorithm is widely applicable in many cryptocurrencies and other blockchain systems?
Answer: B
Explanation:
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.
NEW QUESTION # 49
According to the Financial Action Task Force report, "Virtual Assets Red Flag Indicators", which activity is a red flag related to anonymity?
Answer: B
Explanation:
Red flags related to anonymity include transactions where virtual assets are cashed out at exchanges from peer-to-peer hosted wallets with no clear business rationale. Such behavior indicates attempts to obscure the origin or destination of funds, characteristic of laundering activities.
Executing high-value transactions after inactivity (A) or frequent transfers to known VASPs (C) may be suspicious but are less directly linked to anonymity. Exchanging at a loss (D) is a different type of red flag.
FATF's red flag indicators list (2021) highlights (B) as a key sign of anonymity-related risk.
NEW QUESTION # 50
Which statement regarding cryptocurrencies, digital assets, and blockchain is correct?
Answer: A
Explanation:
Cryptocurrencies are digital currencies secured by cryptography, operating independently from any central bank or government. Blockchain is the underlying distributed ledger technology supporting cryptocurrencies and other digital assets.
Cryptocurrencies and blockchain are not the same (B). Digital assets can exist off-blockchain (C), such as tokenized assets on centralized databases. While cryptocurrencies can be used as payment, blockchain itself is a technology, not a payment method (D).
NEW QUESTION # 51
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