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

How can an individual's transaction history assist in detecting suspicious activity?

1. By providing a comparison to market averages

2. By establishing a pattern of regular transactions

3. By identifying unusual spikes or drops in activity

4. By linking transactions to known criminal activities

The correct answer is: By identifying unusual spikes or drops in activity

The identification of unusual spikes or drops in an individual's transaction history is crucial for detecting suspicious activity because it can indicate behavior that deviates significantly from established norms or patterns. A sudden surge in transaction volume, whether in frequency or transaction value, might suggest illicit activities such as money laundering or fraud, prompting further investigation. Conversely, unexpected drops could signal a potential issue, such as a change in the individual’s financial behavior that could relate to criminal undertakings or attempts to obfuscate activities. Establishing a benchmark through an individual’s normal transaction behavior helps compliance and fraud prevention teams quickly recognize when something is out of the ordinary. This change must align with context-specific factors like economic events, changes in the individual's personal circumstances, or shifts in market conditions, making it a key element in anti-money laundering and anti-financial crime strategies. While comparing to market averages and linking transactions to known criminal activities are also useful, they serve different investigative purposes and may not directly highlight sudden and unexplained changes in an individual's financial behavior as effectively.