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

Which of the following would lead a virtual asset service provider (VASP) to file a suspicious activity report?

1. The majority of the funds were converted and traded in cryptocurrency within 24 hours of the deposit

2. The deposit amounts are aligned with the business activity

3. The beneficial owner of the business is a citizen of the country

4. The location of the business is in a busier urban area

The correct answer is: The majority of the funds were converted and traded in cryptocurrency within 24 hours of the deposit

A virtual asset service provider (VASP) would have a valid reason to file a suspicious activity report (SAR) if most of the funds were converted and traded in cryptocurrency within 24 hours of the deposit. This scenario raises red flags for several reasons. Rapid trading following a deposit can indicate attempts to quickly disguise the origin of funds, a practice often associated with money laundering. Such behavior might suggest that the funds are part of a larger scheme to obscure their source or to facilitate illicit activities, making it necessary for the VASP to report this suspicious activity in compliance with anti-money laundering (AML) regulations. The other options do not inherently signal suspicious activity. Alignment of deposit amounts with typical business operations, ownership by a citizen of the country, or the business's location in a busy urban area do not suggest any immediate red flags. In these cases, the activity might be entirely legitimate, and while they could be factors in a broader assessment, they do not trigger the same level of concern that rapid conversion and trading does.