CCAS Certified Cryptoasset Anti-Financial Crime Specialist Examination Questions and Answers

FATF defines VASPs as entities that conduct one or more of the following activities:

Exchanging one or more forms of virtual assets (B),

Providing financial services related to initial coin offerings (ICOs) (C),

Exchanging virtual assets for fiat currencies or vice versa (D).

Mining operations (A) and software creation (E) are excluded from the VASP definition as they do not involve financial intermediation. Initial public offerings (IPOs) (F) pertain to traditional securities and are outside the scope of VASP activities.

This definition aligns with FATF Recommendation 15 and DFSA regulatory frameworks.

FATF Recommendation 20 mandates that STRs be filed whenever there is suspicion or reasonable grounds to suspect criminal proceeds, regardless of the transaction value. This is mirrored in DFSA and FSRA AML regulations, ensuring that the reporting obligation is triggered by suspicion, not just thresholds.

The risk-based approach requires tailoring AML/CFT controls to the level of assessed risk, enhancing due diligence for higher-risk customers.

Fuzzy matches require further review to confirm whether the match is a true hit or a false positive, ensuring compliance accuracy.

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.

Blockchain’s transparent ledger enables investigators to trace transaction histories indefinitely, aiding ML/TF detection.

Blockchain’s immutability ensures that all transactions remain permanently recorded and tamper-proof, enabling blockchain analytics to trace illicit funds. This property is leveraged in crypto forensic investigations and AML monitoring.

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.

Dusting involves sending tiny amounts of crypto to many addresses to later analyze transaction patterns, potentially deanonymizing users — a privacy and AML concern.

Funds moving through multiple intermediary wallets before arriving at the client’s wallet indicate layering techniques used to obscure the source of funds, a classic money laundering tactic.

Transferring funds quickly (A) or declaring wealth (B) are less definitive indicators. An untraceable IP (C) raises concerns but is less conclusive than complex transactional layering.

The FATF Travel Rule requires Virtual Asset Service Providers to share originator and beneficiary information for virtual asset transfers exceeding a certain threshold. Its purpose is to mitigate ML/TF risks by increasing transparency and enabling authorities to trace the movement of funds across institutions and jurisdictions.

It does not aim to slow transactions (B) or directly enhance CDD (A), although it supports the overall AML framework including CDD.

This rule is a cornerstone of FATF’s efforts to regulate virtual asset transfers effectively and is adopted by DFSA and other regulators.

Suspicious Activity Reports (SARs) are a critical tool for law enforcement agencies. They are primarily used to develop intelligence on potential new criminal targets and to confirm or expand information about existing investigations. SARs do not serve as direct evidence of money laundering in court but provide leads and context that enable law enforcement to build cases.

The DFSA’s thematic reviews and AML guidance clarify that SARs assist in identifying emerging crime patterns and help intelligence units track suspicious transactions over time. They also allow law enforcement to corroborate data from other sources.

SARs help:

Develop intelligence on new targets (C) by revealing previously unknown suspicious behavior.

Confirm or develop information on existing targets (D) by adding transactional data and context.

Identifying regulatory failings (A) is primarily a supervisory function, and SARs themselves are not evidence for prosecution (B) but intelligence inputs.

Therefore, optionsCandDare correct.

Smart contracts execute predetermined conditions automatically on blockchain, enabling decentralized applications and services.

Layering involves creating complex transaction chains to disguise the illicit origin of funds. In crypto, this may involve multiple wallet hops, cross-chain swaps, and the use of privacy-enhancing technologies.

PEPs require enhanced scrutiny under FATF Recommendation 12, including senior management approval and source of funds verification.

Effective risk mitigation requires VASPs to obtain sufficient information about counterpart VASPs to assess the quality of their regulatory supervision and controls. This helps determine the risk of transactions and build a risk-based framework for correspondent relationships.

Having no requirements (A) or engaging with poorly regulated jurisdictions (B) increases risk. Blanket high-risk classification (C) without proper assessment is inefficient.

FATF Recommendation 15 and DFSA guidance emphasize due diligence on counterparties as a critical control.

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.

Arestricted blockchainis one where participation—either in transaction validation, data access, or both—is limited to selected entities rather than being open to the public.

Consortium blockchain (D)is a common type of restricted blockchain in which multiple pre-approved organizations collectively manage the network. It offers partial decentralization but with controlled membership, making it suitable for regulated environments such as financial services, supply chain tracking, and interbank settlements.

Other options explained:

Hybrid (A):Combines elements of public and private chains, but not necessarily “restricted” in the strict governance sense.

Public (B):Open to anyone to join, read, and write data; not restricted.

Private (C):While private blockchains are also restricted, in AML/CFT guidance, “restricted blockchain” generally refers to consortium arrangements involving multiple vetted participants, rather than a single organization’s closed chain.

Regulatory and technical literature in DIFC/ADGM contexts note thatconsortium blockchainsallow for compliance controls, participant vetting, and transaction monitoring—making them particularly suitable for financial ecosystems where controlled access is essential.

SARs should include detailed transactional information to support investigations, including all types and aggregate amounts of cryptocurrencies purchased, along with fiat currency equivalents. This information provides a clear picture of the subject’s activity and financial scale.

Owner names of destination wallets (B) may not be available; onboarding info (D) is supplementary, and fiat aggregate totals (C) alone are insufficient.

FATF and DFSA guidance recommend comprehensive transactional data inclusion in SARs to facilitate law enforcement.

Anonymity-enhanced cryptoassets employ specific technical features to obfuscate the details of transactions and the identities of users to reduce traceability and increase privacy. These include:

Automatic mixing (B):This refers to mechanisms such as coin mixers or tumblers that combine multiple transactions from different users into one batch and redistribute them, breaking the direct transaction link and obscuring the audit trail.

Cryptographic enhancements (D):Techniques such as zero-knowledge proofs, ring signatures, stealth addresses, and confidential transactions are cryptographic protocols that conceal sender, receiver, and transaction amount information, making the blockchain ledger less transparent.

Other options explained:

Proof-of-stake mining (A)is a consensus mechanism and not related to anonymity features.

Secure hashing algorithm 256 (C)is a cryptographic hash function standard but does not directly enhance anonymity.

MetaMask wallet (E)is a non-custodial wallet used mainly for Ethereum and tokens but is not an anonymity tool.

References from official crypto AML guidance and typology papers:

DFSA AML Module and thematic reviews highlight these anonymity techniques as high-risk indicators requiring enhanced due diligence (EDD).

UAE typology papers and FATF virtual asset guidance emphasize the risk posed by anonymity-enhanced cryptoassets using automatic mixing and cryptographic enhancements to circumvent AML controls【AML/VER25/05-24: Sections 6.4, 7.3; 31.92._TFS_Typology_Paper_Eng__4.pdf】.

National risk assessments conducted across various jurisdictions consistently report that money laundering risks related to cryptoasset activities are rising. The growing adoption, complexity, and use of cryptoassets for illicit purposes contribute to elevated risk levels.

While geography (B), awareness (C), and digital banking adoption (D) can influence risk factors, the overarching trend is an increase in ML risks tied to cryptoassets.

This conclusion is supported by FATF’s global guidance and numerous national risk assessment reports reviewed by the DFSA and related authorities

Ring signatures, used in Monero, blend a sender’s transaction with others to obscure sender identity, increasing AML risk.

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.

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.

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.

Machine learning (ML) and artificial intelligence (AI) are applied within compliance frameworks to enhance the efficiency of monitoring and detection processes and to allow skilled compliance resources to focus on higher-value activities such as complex investigations and strategic decision-making. ML/AI tools can process vast amounts of transaction data to identify suspicious patterns faster than manual processes.

They do not reduce the fundamental requirement for risk assessment (A) nor are they intended primarily to reduce headcount (C), but rather to optimize resource allocation.

AML and DFSA guidance emphasize leveraging technology to improve the effectiveness and efficiency of AML controls while maintaining robust risk management.

The Lightning Network is a second-layer payment protocol that enables off-chain transactions, allowing users to conduct fast, low-fee Bitcoin payments without recording every transaction directly on the Bitcoin blockchain. This improves scalability and reduces congestion.

It does not inherently facilitate large payments to decentralized exchanges (A), bridging assets across blockchains (B), or guarantee zero transaction fees (C), though fees are significantly lower than on-chain transactions.

The DFSA and FATF crypto guidance discuss such layer-2 solutions in the context of emerging technological risks and monitoring challenges.