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

Which services are provided by virtual asset service providers according to the Financial Action Task Force?

1. Decentralized finance applications

2. Virtual asset exchange

3. Protocol development

4. Publishing of new virtual asset networks

The correct answer is: Virtual asset exchange

Virtual asset service providers (VASPs) play a crucial role in the cryptoasset ecosystem, particularly in facilitating transactions and services related to virtual assets. The Financial Action Task Force (FATF) defines VASPs as entities that provide services enabling the exchange, transfer, and storage of virtual assets. Virtual asset exchanges are a significant type of VASP, as they allow users to trade virtual assets for fiat currencies or for other digital assets. This service is central to the functioning of the crypto market, enabling liquidity and accessibility for users who wish to buy, sell, or swap cryptocurrencies. By focusing on this service, VASPs contribute to the broader economy of virtual assets while also being subject to regulatory scrutiny to mitigate the risks of money laundering and terrorist financing. In contrast, decentralized finance applications, protocol development, and the publishing of new virtual asset networks, while directly associated with the crypto industry, do not fall under the specific category of services provided by VASPs. These activities typically involve technological development and innovation rather than transaction facilitation in a regulatory context. Thus, they do not align with the FATF's characterization of VASPs.