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

Which situation indicates a high risk of tax evasion using cryptoassets?

1. Someone attempts to open accounts at several domestic exchanges.

2. A corporate entity has accounts at multiple exchanges consistent with its activities.

3. A business receives payment in crypto, but their balance sheet does not reference it.

4. A customer claims cryptoassets from a divorce settlement.

The correct answer is: A business receives payment in crypto, but their balance sheet does not reference it.

The situation that indicates a high risk of tax evasion using cryptoassets is when a business receives payment in crypto, but their balance sheet does not reference it. This scenario raises red flags for potential tax evasion for several reasons. First, businesses are typically required to report all forms of income, including crypto payments, on their financial statements. If a business receives crypto as payment but fails to disclose it on its balance sheet, it suggests a deliberate effort to hide income that may be subject to taxation. This omission could signal that the business is trying to evade tax liabilities by not reporting the income derived from crypto transactions. Furthermore, transparency in financial reporting is essential for regulatory compliance. A failure to record cryptoassets could attract scrutiny from tax authorities, as it may indicate that the business is not adhering to tax laws designed to capture all economic activities. In contexts where there are increasing regulatory requirements for disclosures related to cryptoassets, such an omission is particularly concerning. It is an indication that the entity may not only be avoiding taxes but could also be engaging in other forms of financial misconduct. In contrast, the other scenarios do not inherently suggest a high risk of tax evasion. Opening accounts at several domestic exchanges, having accounts at different exchanges consistent with business activities,