Which key differences between the Bitcoin and Ethereum blockchains must investigators consider when investigating flows of funds on each respective chain? (Select Two.)
Answer(s): B,D
Bitcoin and Ethereum have fundamental differences important to investigators:Variety of applications, assets, and networks (B): Ethereum supports diverse decentralized applications (dApps), multiple tokens (ERC-20, ERC-721), and various networks, complicating transaction tracing compared to Bitcoin's primary use as a cryptocurrency.Ledger model (D): Ethereum uses an account-based ledger model, while Bitcoin uses a UTXO (unspent transaction output) model, affecting how transactions are recorded and analyzed.Transaction cost (A) and address length (C) differ but are less relevant for fund flow investigations.
Which statement regarding cryptocurrencies, digital assets, and blockchain is correct?
Answer(s): A
Cryptocurrencies are digital currencies secured by cryptography, operating independently from any central bank or government. Blockchain is the underlying distributed ledger technology supporting cryptocurrencies and other digital assets.Cryptocurrencies and blockchain are not the same (B). Digital assets can exist off-blockchain (C), such as tokenized assets on centralized databases. While cryptocurrencies can be used as payment, blockchain itself is a technology, not a payment method (D).
A customer who runs a cryptoasset automated teller machine (ATM) comes into a financial institution and deposits a larger than usual amount. When asked about the deposit, the customer answers there has been broader adoption of cryptoassets in the region where the ATM is located. Which additional information about the business would indicate high risk for money laundering? (Select Two.)
Answer(s): C,D
Money laundering risk increases if the business operates in or near high-risk jurisdictions (D) or regions associated with narcotics production (C), as these are common sources of illicit funds.An increase in volume and users (A) or supporting various cryptoassets (B) alone does not necessarily increase ML risk. Recent licensing (E) may indicate regulatory compliance, potentially lowering risk.
Which business category below is considered to present the highest risk of money laundering?
Answer(s): D
Art dealers present a high money laundering risk due to the subjective valuation of art, ease of transferring assets, and the potential for using art as a vehicle to conceal illicit funds.Registered hedge funds (A) and law firms (C) have AML obligations but are generally more regulated. Pharmaceutical companies (B) are less associated with high ML risk.The DFSA AML and FATF typology papers specifically identify art dealing as a sector with heightened ML risk.
The Financial Action Task Force recommends countries require virtual asset service providers to maintain all records of transactions and customer due diligence measures for a minimum of:
Answer(s): C
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.
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