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

What illicit activity does larger-than-normal virtual asset deposits followed by conversion to fiat currency most likely indicate?

1. Regulatory arbitrage

2. Ransomware payment

3. Kickback payments

4. Money laundering

The correct answer is: Money laundering

Larger-than-normal virtual asset deposits that are subsequently converted to fiat currency often serve as indicators of money laundering activities. This process typically involves moving illicit funds through various layers of transactions, making it difficult for authorities to trace the origin of the money. In a typical money laundering scheme, individuals or organizations will deposit large sums of virtual currencies, which can be more difficult to trace than traditional financial assets. Following this, they may convert these assets into fiat currency, thereby integrating the laundered money into the legitimate financial system. The sudden increase in deposits and their rapid conversion to fiat can be a red flag for financial institutions and regulatory entities, signaling that these transactions may be part of an attempt to obscure the source of funds. While other options can also be associated with illegal activities, the described pattern of behavior is most commonly linked to laundering operations where the intent is to conceal the illicit origin of the assets by passing them through virtual currencies before returning them to the traditional financial system.