Acams CCAS Exam Practice Test Instant Access

Question 1

Which is the first action a virtual asset service provider (VASP) should take when it finds out that its customers are engaging in virtual asset (VA) transfers related to unhosted wallets and peer-to-peer (P2P) transactions?

AAllow VA transfers related P2P or unhosted wallets below 1,000 USD or the equivalent amount in local currency, or per defined thresholds in local regulations.

BFreeze accounts with records of transactions related to P2P transactions or unhosted wallets.

CCollect and assess the data on transactions related to P2P or unhosted wallets to determine if it is within its risk appetite.

DEnhance existing risk-based control framework to account for specific risks posed by transactions related to P2P or unhosted wallets.

Answer : C

Upon identifying customer engagement with unhosted wallets or P2P transfers, the first step a VASP should take is to collect and assess data on such transactions. This assessment helps determine if these activities fall within the firm's risk appetite and what enhanced controls or actions may be needed.

Immediate account freezing (B) is not the first step without assessment; neither is allowing transfers (A) without risk consideration. Enhancing risk frameworks (D) is important but follows from an initial data-driven risk assessment.

Relevant guidance:

FATF Recommendations and DFSA AML Module require VASPs to maintain a risk-based approach that begins with data collection and risk assessment on unhosted wallet transactions.

The DFSA's 2023 Dear MLRO letters and thematic reviews stress proportionality and evidence-based responses rather than immediate punitive measures.

Enhanced due diligence (EDD) and risk mitigation measures, including potentially freezing accounts, come after assessment of the risk levelAML/VER25/05-24: Sections 4.1, 6.4, 13; 20230406Dear_MLRO_Letter_re_IEMS.pdf.

Hence, C is the appropriate first action.

Question 2

Under the risk-based approach, firms must:

AApply the same level of due diligence to all customers

BAdjust controls based on customer and transaction risk level

CAvoid onboarding high-risk customers

DOnly monitor transactions over USD 10,000

Answer : B

The risk-based approach requires tailoring AML/CFT controls to the level of assessed risk, enhancing due diligence for higher-risk customers.

Question 3

What is a ''smart contract''?

AA legal agreement stored offline.

BA self-executing code stored on blockchain.

CA compliance monitoring tool.

DA cold storage wallet type.

Answer : B

Smart contracts execute predetermined conditions automatically on blockchain, enabling decentralized applications and services.

Question 4

Which operational risk mitigation practice by virtual asset service providers (VASPs) is most effective when considering their relationships with other VASPs?

AHaving no requirement to establish a correspondent relationship and build a risk assessment framework among other cryptoasset exchanges prior to transferring for or on behalf of another person

BDeveloping cross-border correspondent relationships with cryptoasset exchanges in jurisdictions that have weak or non-existent anti-money laundering (AML) regulation or supervision

CAssigning all such relationships as high risk and conducting enhanced due diligence on all of them

DGathering sufficient information on the counterpart VASP to determine the quality of the supervision it receives for transactional activities

Answer : D

Effective risk mitigation requires VASPs to obtain sufficient information about counterpart VASPs to assess the quality of their regulatory supervision and controls. This helps determine the risk of transactions and build a risk-based framework for correspondent relationships.

Having no requirements (A) or engaging with poorly regulated jurisdictions (B) increases risk. Blanket high-risk classification (C) without proper assessment is inefficient.

FATF Recommendation 15 and DFSA guidance emphasize due diligence on counterparties as a critical control.

Question 5

Which term describes converting one cryptoasset into another without first converting to fiat?

ALayering

BChain hopping

CIntegration

DStructuring

Answer : B

Chain hopping involves moving between blockchains to make tracing harder, often exploiting regulatory gaps.

Question 6

What is the intention of the Financial Action Task Force's (FATF's) Travel Rule?

ATo enhance customer due diligence (CDD) procedures to ensure high quality data

BTo slow down cryptoasset transactions to allow law enforcement to intervene

CTo mitigate money laundering and terrorist financing (ML/TF) risk by increasing the ability to follow funds via different financial institutions

Answer : C

The FATF Travel Rule requires Virtual Asset Service Providers to share originator and beneficiary information for virtual asset transfers exceeding a certain threshold. Its purpose is to mitigate ML/TF risks by increasing transparency and enabling authorities to trace the movement of funds across institutions and jurisdictions.

It does not aim to slow transactions (B) or directly enhance CDD (A), although it supports the overall AML framework including CDD.

This rule is a cornerstone of FATF's efforts to regulate virtual asset transfers effectively and is adopted by DFSA and other regulators.

Question 7

The lightning network is a payment protocol built on top of the Bitcoin blockchain that:

Aallows users to send large payments to decentralised exchanges

Ballows the bridging of assets from one blockchain to another.

Callows users to take advantage of no transaction fees.

Dallows users to conduct transactions off-chain

Answer : D

The Lightning Network is a second-layer payment protocol that enables off-chain transactions, allowing users to conduct fast, low-fee Bitcoin payments without recording every transaction directly on the Bitcoin blockchain. This improves scalability and reduces congestion.

It does not inherently facilitate large payments to decentralized exchanges (A), bridging assets across blockchains (B), or guarantee zero transaction fees (C), though fees are significantly lower than on-chain transactions.

The DFSA and FATF crypto guidance discuss such layer-2 solutions in the context of emerging technological risks and monitoring challenges.

Acams Certified Cryptoasset Anti-Financial Crime Specialist Examination CCAS Exam Practice Test