Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

A bank with a moderate risk appetite wants to launch a high-risk cryptocurrency payment product. What is the best risk-based approach?

1. Allow the product to launch globally and rely on transaction monitoring

2. Do not launch the product due to high financial crime risk

3. Allow the product to launch only for low-risk countries and customers

4. Allow the product to launch but not for high-risk countries and customers

The correct answer is: Allow the product to launch only for low-risk countries and customers

The best risk-based approach in this scenario, where a bank with a moderate risk appetite is considering a high-risk cryptocurrency payment product, is to allow the product to launch only for low-risk countries and customers. This approach effectively mitigates potential risk while allowing the bank to explore new offerings within a defined and manageable scope. By restricting the launch to low-risk jurisdictions and clientele, the bank can better control its exposure to financial crime and compliance violations associated with high-risk activities. This strategy also aligns with regulatory expectations, which often encourage institutions to identify and manage risks appropriately based on the profiles of their customers and the jurisdictions they operate in. Engaging only with low-risk countries and customers helps ensure that enhanced due diligence measures can be more effectively implemented, reducing the overall risk profile of the product. If the product were to be launched globally or in high-risk areas, it could expose the bank to heightened liabilities and scrutiny, which doesn't align with its current moderate risk appetite. Therefore, limiting the launch to low-risk entities provides a balanced approach to innovation and risk management.