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

Which situation indicates the highest level of suspicion in a financial transaction?

1. An individual receives a US$2 million transfer consistent with KYC.

2. An individual receives five large wire transfers inconsistent with KYC.

3. A large company receives multiple transfers with no negatives found.

4. An individual receives small amounts totaling US$100,000 for charity.

The correct answer is: An individual receives five large wire transfers inconsistent with KYC.

The situation where an individual receives five large wire transfers inconsistent with KYC practices indicates the highest level of suspicion in a financial transaction. This is because Know Your Customer (KYC) procedures are designed to ensure that financial institutions verify the identity of their clients and assess potential risks of illegal activities. When an individual's financial activities deviate from established KYC norms, it raises red flags regarding the legitimacy of those transactions. Receiving multiple large transfers, particularly when they do not align with what is known about the individual’s financial profile or the source of the funds, may suggest potential risks, including money laundering or fraud. The volume and inconsistency with KYC norms amplify the concerns, warranting further investigation to determine the purpose and legality of these transactions. In contrast, the other scenarios present lesser levels of suspicion. A single large transfer that aligns with KYC guidelines may not raise significant concerns. Multiple transfers to a reputable company without negative findings do not evoke suspicion, as they suggest legitimate activity. Additionally, receiving smaller amounts for charity typically indicates normal and benign behavior, further reducing suspicion levels. Thus, option B stands out as the situation that most clearly requires heightened scrutiny.