Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

What is the primary purpose of money laundering?

1. To purchase criminal goods or services

2. To transfer the proceeds from a bank account to a holding company

3. To safely collect the proceeds of criminal activities

4. To make criminally derived property or funds appear to be legitimate

The correct answer is: To make criminally derived property or funds appear to be legitimate

The primary purpose of money laundering is to make criminally derived property or funds appear to be legitimate. This process is crucial for individuals or entities who have gained funds through illicit activities, such as drug trafficking, fraud, or corruption. By disguising the origins of these funds, criminals can integrate this money into the legitimate economy, allowing them to use it without drawing attention to their illegal sources. Money laundering typically involves a series of steps including placement, layering, and integration. In the placement stage, illicit cash is introduced into the financial system. The layering stage involves complex financial transactions designed to obscure the illegal origin of the funds. Finally, in the integration phase, the laundered money is reintroduced into the economy, making it difficult to trace back to its criminal origins. This process is essential for criminals wanting to enjoy the benefits of their activities without facing legal repercussions. It is a major focus of anti-financial crime measures because of the significant impact it has on society and economies at large.