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

What could make tracing transactions linked to stolen funds challenging?

1. Increased security measures preventing fund tracking.

2. Difficulty in correlating funds entering and exiting services.

3. GDPR restrictions on user data collection.

4. Transparency of the ledger preventing tracing.

The correct answer is: Difficulty in correlating funds entering and exiting services.

Tracing transactions linked to stolen funds can be challenging due to the difficulty in correlating funds entering and exiting services. In many cases, the movement of funds through various platforms, wallets, or mixers can obscure the original source of the stolen assets. As funds flow through multiple layers of transactions, it may become increasingly complex to identify where the original funds came from, and how they were transformed or obfuscated during their movement. Additionally, transactions involving multiple cryptocurrencies or exchanges can introduce further complications, as each platform may have its own transaction structure and record-keeping practices. This lack of uniformity makes it harder for investigators to provide a clear and coherent audit trail. In contrast, while increased security measures, GDPR restrictions, and ledger transparency do play roles in the broader context of transaction tracing, they do not directly address the specific difficulties in tracing the flow of stolen funds as presented in this scenario. For instance, while security measures may complicate access to transactional data, they do not inherently hinder the correlation of transaction paths as significantly as the intricate nature of multiple fund movements does.