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

Which two functions are associated with the definition of a virtual asset service provider?

1. Creating virtual currency or securities tokens

2. Facilitating transactions between virtual asset and fiat currencies

3. Issuing non-fungible tokens

4. Conducting exchanges between different virtual assets

The correct answer is: Facilitating transactions between virtual asset and fiat currencies

The designation of a virtual asset service provider (VASP) encompasses various activities related to digital assets. Among these, facilitating transactions between virtual assets and fiat currencies is a critical function. This involves acting as an intermediary that allows users to exchange their digital currencies for traditional government-issued currency, thereby bridging the gap between the virtual and fiat worlds. VASPs play a necessary role in making virtual assets more accessible to the broader public and integrate them into the conventional financial system. While creating virtual currency or securities tokens and issuing non-fungible tokens are activities associated with the broader ecosystem of digital assets, they do not specifically define the service-providing function of a VASP. These activities are more focused on the creation and innovation side of the virtual asset landscape rather than the facilitation of transactions, which is the core responsibility of a VASP. Conducting exchanges between different virtual assets is another function related to the operations of a VASP, but it specifically pertains to transactions within the realm of virtual assets rather than bridging them with fiat currencies. Thus, the correct answer identifies the fundamental role of VASPs in enabling financial transactions involving both virtual and fiat assets.