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

Which of the following indicates suspicious activity involving cryptoassets?

1. Large transactions occurring in a single day

2. Frequent small trades on decentralized platforms

3. Transactions to high-risk jurisdictions

4. Use of multiple wallets for small transactions

The correct answer is: Transactions to high-risk jurisdictions

Suspicious activity involving cryptoassets can often be identified by the nature of the transactions taking place. Transactions to high-risk jurisdictions are particularly indicative of potential illicit activity, as certain areas may be known for high levels of financial crime, including money laundering and the funding of illegal activities. When funds are transferred to or from these jurisdictions, it raises red flags for regulators and financial institutions. High-risk jurisdictions typically have lax regulatory frameworks, weak enforcement of financial laws, or are identified by organizations like FATF (Financial Action Task Force) as having strategic deficiencies in their anti-money laundering (AML) measures. Thus, transactions to such areas can signal attempts to bypass stricter controls, making them highly suspicious in the context of anti-financial crime efforts. In contrast, large transactions occurring in a single day, frequent small trades on decentralized platforms, or the use of multiple wallets for small transactions may not inherently suggest suspicious behavior; they could arise from legitimate trading strategies or patterns among users. Therefore, while they may warrant further scrutiny, they lack the direct association with illicit activities that transactions to high-risk jurisdictions possess.