Free and Premium ACAMS CCAS Dumps Questions Answers

Hash rate measures computational power in Proof-of-Work blockchains; higher hash rates mean more secure networks against 51% attacks.

The ultimate responsibility for risk oversight lies with the Board of Directors. Senior management and the board have the fiduciary and governance duty to ensure that an effective risk management framework, including AML/CFT controls and cryptoasset-specific risks, is in place and functioning properly.

The DFSA GEN Module and AML Module explicitly allocate the highest accountability for compliance and risk oversight to the Board of Directors, while first and second lines support implementation and oversight respectively. The Chief Risk Officer (CRO) supports risk management but the board maintains ultimate accountability.

Key extracts:

GEN Module, Chapter 5: “Responsibility for compliance lies with every member of senior management, with ultimate oversight by the Board.”

AML Module Section 1.2 & 4.1: “Senior management and Board must ensure appropriate systems and controls for AML/CFT risk management.”

FATF Recommendation 2 underscores that senior management and boards are accountable for effective AML governance【GEN/VER64/05-24: Chapter 5; AML/VER25/05-24: Sections 1.2, 4.1】.

Thus,Dis the correct answer.

Indirect exposure refers to a situation where cryptoassets are not directly associated with illicit activity but have transactional links through other addresses that are associated with risky or illicit behavior. Blockchain analytics tools detect these indirect links to flagged addresses, allowing firms to assess risk based on network connections rather than direct ownership or activity.

The DFSA AML guidance and international FATF Virtual Assets guidance explain that indirect exposure is a critical concept for transaction monitoring as it broadens the detection scope beyond direct transactions, flagging assets that might be “tainted” through intermediary addresses.

Upon identifying customer engagement with unhosted wallets or P2P transfers, the first step a VASP should take is tocollect and assess dataon 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 level【AML/VER25/05-24: Sections 4.1, 6.4, 13; 20230406Dear_MLRO_Letter_re_IEMS.pdf】.

Hence,Cis the appropriate first action.

Machine learning (ML) and artificial intelligence (AI) are applied within compliance frameworks to enhance the efficiency of monitoring and detection processes and to allow skilled compliance resources to focus on higher-value activities such as complex investigations and strategic decision-making. ML/AI tools can process vast amounts of transaction data to identify suspicious patterns faster than manual processes.

They do not reduce the fundamental requirement for risk assessment (A) nor are they intended primarily to reduce headcount (C), but rather to optimize resource allocation.

AML and DFSA guidance emphasize leveraging technology to improve the effectiveness and efficiency of AML controls while maintaining robust risk management.

Criminals often move cryptoassets through multiple intermediary wallets (many “hops”) rapidly to obfuscate the transaction trail and avoid clustering, which blockchain analytics use to link related addresses.

Simply receiving large amounts (A), holding assets (B), or splitting movements (D) are less effective at preventing clustering.

In the context of AML/CFT frameworks for cryptoassets, the investigation of transaction histories involves blockchain analysis tools to trace the flow of funds to and from crypto addresses. Specifically, it is essential to assess whether the addresses involved have had prior exposure to illicit activities such as known darknet marketplaces, ransomware payments, or sanctioned entities. This form of "address screening" helps identify potentially tainted cryptoassets.

The DFSA AML Module and associated guidance emphasize that transaction monitoring for cryptoassets requires analyzing the provenance of funds, not just ownership. While identifying the owner is part of customer due diligence (CDD), the transactional exposure itself reveals laundering risks embedded in the chain of transfers.

Extract from DFSA AML Module and COB Module on Crypto Business Rules:

"Transaction monitoring systems must include blockchain analysis to detect suspicious activity related to crypto tokens, including tracing transactions against known illicit sources."

"Enhanced due diligence (EDD) is required when a cryptoasset transaction involves addresses or wallets with a history of illicit activity."

"Risk-based approaches must integrate forensic review of transaction histories to assess financial crime risks in crypto asset transfers"【AML/VER25/05-24: Sections 6.3, 7.3, 13.3; COB/VER45/05-24: Sections 6.13, 15】.

Therefore, assessing the receiving exposure of cryptoasset addresses to illicit activity (Option C) is the most direct and effective method to detect laundering.

EDD is required when dealing with customers or transactions from jurisdictions identified as high-risk for ML/TF. This aligns with FATF Recommendation 19 and local UAE regulations.

PEPs require enhanced scrutiny under FATF Recommendation 12, including senior management approval and source of funds verification.

The EU’s Markets in Crypto-Assets Regulation (MICA) applies specifically to:

Electronic Money Tokens (B): Tokens that fulfill the definition of electronic money under the E-Money Directive.

Cryptoassets (D): Broad category including digital representations of value that are not covered by existing financial services legislation.

Asset-Referenced Tokens (E): Tokens that purport to maintain a stable value by referencing one or several assets.

Meme coins (A) and privacy coins (C) are not separately classified under MICA but may fall under broader cryptoasset categories subject to other regulations.

Red flags related to anonymity include transactions where virtual assets are cashed out at exchanges from peer-to-peer hosted wallets with no clear business rationale. Such behavior indicates attempts to obscure the origin or destination of funds, characteristic of laundering activities.

Executing high-value transactions after inactivity (A) or frequent transfers to known VASPs (C) may be suspicious but are less directly linked to anonymity. Exchanging at a loss (D) is a different type of red flag.

FATF’s red flag indicators list (2021) highlights (B) as a key sign of anonymity-related risk.

Blockchain’s transparent ledger enables investigators to trace transaction histories indefinitely, aiding ML/TF detection.

Blockchain’s immutability ensures that all transactions remain permanently recorded and tamper-proof, enabling blockchain analytics to trace illicit funds. This property is leveraged in crypto forensic investigations and AML monitoring.

On-chain forensic analysis uses blockchain data to detect illicit wallet patterns and cluster associations.

Privacy coins like Monero use cryptographic features to obscure transaction details, increasing AML risk and regulatory scrutiny.

Arestricted blockchainis one where participation—either in transaction validation, data access, or both—is limited to selected entities rather than being open to the public.

Consortium blockchain (D)is a common type of restricted blockchain in which multiple pre-approved organizations collectively manage the network. It offers partial decentralization but with controlled membership, making it suitable for regulated environments such as financial services, supply chain tracking, and interbank settlements.

Other options explained:

Hybrid (A):Combines elements of public and private chains, but not necessarily “restricted” in the strict governance sense.

Public (B):Open to anyone to join, read, and write data; not restricted.

Private (C):While private blockchains are also restricted, in AML/CFT guidance, “restricted blockchain” generally refers to consortium arrangements involving multiple vetted participants, rather than a single organization’s closed chain.

Regulatory and technical literature in DIFC/ADGM contexts note thatconsortium blockchainsallow for compliance controls, participant vetting, and transaction monitoring—making them particularly suitable for financial ecosystems where controlled access is essential.

Small-value repeated payments to known extremist donation wallets are a terrorism financing indicator noted in FATF typology reports.

FATF defines VASPs as entities that conduct one or more of the following activities:

Exchanging one or more forms of virtual assets (B),

Providing financial services related to initial coin offerings (ICOs) (C),

Exchanging virtual assets for fiat currencies or vice versa (D).

Mining operations (A) and software creation (E) are excluded from the VASP definition as they do not involve financial intermediation. Initial public offerings (IPOs) (F) pertain to traditional securities and are outside the scope of VASP activities.

This definition aligns with FATF Recommendation 15 and DFSA regulatory frameworks.

A 51% attack refers to a situation where a single miner or group controls more than 50% of the blockchain network’s computational (hashing) power. This majority control allows them to manipulate the blockchain ledger by double-spending or blocking transactions.

This term is widely recognized in blockchain security contexts and is referenced in typology papers on crypto financial crime risks, including those issued by UAE authorities and FATF.

Supporting extracts:

DFSA AML thematic reviews mention the risk of manipulation and double spending in blockchains susceptible to 51% attacks.

Typology reports on cryptoasset risks highlight computational power concentration as a core vulnerability.

“51% refers to the percentage of total mining power or computational power in the network” is the standard definition across crypto AML/CFT frameworks【31.92._TFS_Typology_Paper_Eng__4.pdf; AMLCFT_Guidance_for_FIs.pdf】.

Thus,Cis correct.

The Travel Rule, part of FATF Recommendation 16, requires VASPs to share sender and recipient information for virtual asset transfers above USD/EUR 1,000. The aim is to enable tracing and detection of illicit funds.

Private blockchains are controlled by a single organization with full access restrictions. This model is often used for internal record-keeping but lacks the decentralized trust of public chains.

Hash immutability means that altering any transaction would require changing all subsequent blocks and achieving majority consensus. This security property underpins blockchain integrity and forensic traceability, crucial in AML investigations.

Anonymity-enhanced cryptoassets employ specific technical features to obfuscate the details of transactions and the identities of users to reduce traceability and increase privacy. These include:

Automatic mixing (B):This refers to mechanisms such as coin mixers or tumblers that combine multiple transactions from different users into one batch and redistribute them, breaking the direct transaction link and obscuring the audit trail.

Cryptographic enhancements (D):Techniques such as zero-knowledge proofs, ring signatures, stealth addresses, and confidential transactions are cryptographic protocols that conceal sender, receiver, and transaction amount information, making the blockchain ledger less transparent.

Other options explained:

Proof-of-stake mining (A)is a consensus mechanism and not related to anonymity features.

Secure hashing algorithm 256 (C)is a cryptographic hash function standard but does not directly enhance anonymity.

MetaMask wallet (E)is a non-custodial wallet used mainly for Ethereum and tokens but is not an anonymity tool.

References from official crypto AML guidance and typology papers:

DFSA AML Module and thematic reviews highlight these anonymity techniques as high-risk indicators requiring enhanced due diligence (EDD).

UAE typology papers and FATF virtual asset guidance emphasize the risk posed by anonymity-enhanced cryptoassets using automatic mixing and cryptographic enhancements to circumvent AML controls【AML/VER25/05-24: Sections 6.4, 7.3; 31.92._TFS_Typology_Paper_Eng__4.pdf】.

The Financial Action Task Force (FATF) guidance on Virtual Assets and Virtual Asset Service Providers (VASPs) explicitly highlights that transactions involving unhosted wallets (wallets not held or controlled by a regulated entity) pose a high inherent risk for money laundering and terrorist financing. This is because unhosted wallets are more difficult to monitor and control, lack identifiable customer information, and are often exploited for illicit activities.

The DFSA AML Module, aligned with FATF recommendations, mandates that Relevant Persons incorporate this risk into their business-wide risk assessments. The increased volume of transactions to and from unhosted wallets should therefore be assigned ahigh inherent risk ratingto trigger enhanced controls such as enhanced due diligence (EDD) and transaction monitoring.

Supporting extracts include:

FATF Guidance on Virtual Assets (October 2021) states: "Unhosted wallets or transactions with them represent a high risk of ML/TF due to limited or no access to identifying information."

DFSA AML Module (AML/VER25/05-24) Section 4.1 & 6.1 on Risk-Based Approach: mandates firms to assess and rate risks posed by customers and products, explicitly including virtual assets and unhosted wallets as high risk.

COB Module also requires heightened controls and disclosures when dealing with transactions involving unhosted wallets【AML/VER25/05-24: Sections 4.1, 6.1, COB/VER45/05-24: Sections 6.13, 15.6】.

Thus, optionD (High)is the correct risk rating.

Management must consider a comprehensive set of features when evaluating virtual asset products and services, including:

Ability for other VASPs to utilize the service (A):This increases risk exposure as services may be used indirectly by unknown parties.

Ability to mingle funds within wider pools (B):Mixing services or pooled wallets increase anonymity and laundering risk.

Regulatory expectations (C):Management must ensure compliance with all applicable laws and guidelines.

Transaction volumes (D):High transaction volumes can increase operational risk and require enhanced monitoring.

The DFSA AML and COB Modules, as well as FATF guidance, stress that a risk-based approach requires consideration of all these features in product/service risk assessments.

Ring signatures, used in Monero, blend a sender’s transaction with others to obscure sender identity, increasing AML risk.

Liquidity risk assessment focuses on the ability to execute trades without large price swings, which is reflected in order book depth and bid-ask spreads.

FATF standards specify that Virtual Asset Service Providers (VASPs) must keep records related to transactions and customer due diligence for at least 5 years after the completion of the transaction or end of the business relationship. This retention period facilitates effective AML investigations and regulatory reviews.

DFSA AML Module aligns with this timeframe, reinforcing that comprehensive record retention supports audit trails and compliance verification.

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

Misconfigured or poorly designed smart contracts can enable rug pull scams, where developers create fraudulent decentralized finance (DeFi) projects or tokens and then withdraw liquidity or funds abruptly, leaving investors with worthless assets.

Phishing (A) and SIM attacks (B) relate to social engineering and telecom fraud, respectively, and ransomware (D) is malware demanding payment. Rug pulls specifically exploit smart contract vulnerabilities.

The DFSA and AML thematic reviews on crypto highlight rug pull scams as a key operational and financial crime risk linked to smart contract vulnerabilities.