Question 1

Which of the following are red flag indicators specifically related to anonymity? (Select Two.)

Options :

A : Use of decentralized or hardware wallets to transport cryptoassets across borders

B : Users utilizing mixing services

C : Use of privacy-orientated email services

D : Use of cryptoassets that are linked to fraudulent schemes

E : Users exhibiting unusual sign-on activity

Answer: A,B

Question 2

Which features are used by anonymity-enhanced cryptoassets to reduce transparency of transactions and identities? (Select Two.)

Options :

A : Proof-of-stake mining

B : Automatic mixing

C : Secure hashing algorithm 256

D : Cryptographic enhancements

E : MetaMask wallet

Answer: B,D

Question 3

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

Options :

A : To enhance customer due diligence (CDD) procedures to ensure high quality data

B : To slow down cryptoasset transactions to allow law enforcement to intervene

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

Answer: C

Question 4

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

Options :

A : Layering

B : Chain hopping

C : Integration

D : Structuring

Answer: B

Question 5

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

Options :

A : Having 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

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

C : Assigning all such relationships as high risk and conducting enhanced due diligence on all of them

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

Answer: D

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