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

When evaluating a virtual asset service provider (VASP), what risk should a financial institution consider?

1. Proof-of-work and proof-of-stake cryptoassets offered by VASP

2. The VASP does not participate in Bitcoin Lightning Network

3. The number and types of cryptoassets the VASP provides

4. The VASP provides open source code for developers

The correct answer is: The number and types of cryptoassets the VASP provides

When evaluating a virtual asset service provider (VASP), it is crucial for a financial institution to consider the number and types of cryptoassets the VASP provides. This factor directly relates to the level of risk associated with the various assets being offered. A diverse range of cryptoassets can indicate a more complex ecosystem, which may introduce additional risks related to regulatory compliance, market volatility, and the potential for facilitating illicit activities. Understanding the specific types of cryptoassets, as well as their usage and the communities surrounding them, helps institutions assess their exposure to financial crime risks. In the context of anti-financial crime practices, this consideration allows institutions to determine if the VASP is engaging in transactions involving assets that are more susceptible to abuse or have higher risk profiles, such as privacy coins. This insight is essential for developing appropriate risk mitigation strategies and ensuring compliance with regulatory expectations.