Pass the ACAMS AML CCAS Questions and answers with ValidTests

An effective AML CDD program must include:

Staff training on gathering CDD (A)

Maintaining complete information to support risk profiling (B)

Procedures to address situations where the customer's true identity is unclear or questionable (F)

Annual client reviews (D) and IP address monitoring (E) may be part of broader AML controls but are not fundamental CDD requirements. Maintaining a list of high-risk virtual assets (C) is important but relates more to product risk management than direct CDD.

Funds moving through multiple intermediary wallets before arriving at the client’s wallet indicate layering techniques used to obscure the source of funds, a classic money laundering tactic.

Transferring funds quickly (A) or declaring wealth (B) are less definitive indicators. An untraceable IP (C) raises concerns but is less conclusive than complex transactional layering.

Code uniqueness is critical because reuse or replication of vulnerable code exposes protocols to known exploits. Unique, well-audited, and secure code minimizes compromise risk in decentralized finance (DeFi) and smart contracts.

Security standards (A), authentication (B), and regulation (C) are important but secondary to the fundamental security of the code itself.

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

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.

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.

The risks posed by different payment methods fall under the products and services risk category because payment methods are specific services and products offered by financial institutions or businesses. This category assesses inherent risks linked to how products are designed and used.

Geographical (A) relates to location risks; customers (B) relates to the nature of customers; new technologies (C) covers emerging tools but payment methods are classified under products/services.

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.

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.

Privacy tokens are specifically designed to obfuscate transaction details such as sender, recipient, and amounts, making them inherently high risk for money laundering and terrorist financing. Their anonymity-enhanced features pose significant challenges to AML efforts.

Stablecoins (B), platform tokens (C), and security tokens (D) have varying risk profiles but generally provide more transparency or are subject to regulatory frameworks, reducing inherent AML risk compared to privacy tokens.

FATF and DFSA AML frameworks highlight privacy tokens as a priority for enhanced due diligence and risk mitigation due to their abuse potential.