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AML Trivia Flashcards | StudBud
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AML Trivia
AML Trivia
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ACAMS Connecticut Chapter's AML Trivia Night!
Flashcards
50 cards
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Practice quiz
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Host live
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Questions
50
Answers
1
In the context of model governance, which of the following is responsible for approving the use and monitoring of models
Front-Line Business Users
Independent Validation Function
Senior Management
Internal Audit
2
Which one of the following cryptocurrencies holds a reputation for enhanced anonymity and reduced traceability?
Monero (XMR)
Bitcoin (BTC)
Dogecoin (DOGE)
Cardano (ADA)
3
A core regulatory concern with Third-Party Payment Processors (TPPPs) is that they can:
Increase customer satisfaction with legacy systems.
Enable Fintechs to avoid consumer protection regulations.
Create layered relationships that obscure the nature of transactions.
Reduce the effectiveness of marketing tools in digital banking.
4
Who must be screened against the OFAC list?
Only financial institutions
Only domestic companies
Only foreign nationals
All individuals and entities doing business in the US
5
Which of the following is the best example of "integration" in the money laundering cycle?
Purchase of luxury assets like property, art work, jewelry, etc.
Microstructuring cash deposits into a single financial institution
Movement of illicit funds through digital currencies to conceal funds
Patterns of high velocity B2B electronic transfers
6
FinCEN requires financial institutions to do what for backfiled/amended CTRs?
Send a backup letter confirming that the reports have been backfiled/amend
Take no additional action
When eFiling, select item 1 "incorrect/amend subsequent report"
Involve legal counsel
7
Which of the following is a primary purpose of conducting a BSA/AML Risk Assessment?
To comply with customer service standards
To ensure the bank's profitability
To identify/mitigate risks associated with AML/CTF
To evaluate employee performance
8
OFAC compliance only applies to U.S. citizens.
True
False
9
Which AML vulnerability is unique to virtual credit cards?
High interest rates
Lack of customer interest
Inability to track physical location of use
Limited merchant acceptance
10
All SAR filings are public and available online.
True
False
11
According to FinCEN, which 2 countries were identified in the subject address fields of fentanyl BSA reports?
India and Pakistan
Russia and Ukraine
Mexico and the People's Republic of China
Colombia and Venezuela
12
If a US dollar transaction between 2 non-US parties clears a US bank, it would not be subject to OFAC.
True
False
13
Which of the following is a key challenge in sanctions screening for non-Latin character names?
Transliteration inconsistencies
Overreliance on fuzzy logic
Frequency of aliases
Use of single-word mononyms
14
Which of the following is a mitigation strategy for AML risks in credit card issuing?
Offering unlimited credit lines
Disabling international transactions
Implementing real-time transaction monitoring with behavior analytics
Reducing credit limits for all users
15
Which of the following best describes the 2 step process for developing a BSA/AML risk assessment?
Identifying risk categories and implementing new products.
Identifying specific risk categories & analyzing the info to assess risks.
Hiring external consultants and conducting employee training.
Reviewing past audits and increasing marketing efforts.
16
Under OFAC's 2024 Compliance Framework, which of the following is a component of a Sanctions Compliance Program?
Outsourced sanctions screening
Automated marketing tools
Internal controls tailored to risk profile
Annual employee bonuses
17
A beneficial owner under the CTA is defined as an individual who owns/ controls at least ___% of the company's ownership
10%
25%
50%
20%
18
OFAC has how many unique sanctions programs?
120
10
4
30
19
Which blockchain analysis technique is used to detect mixer usage for layering in crypto-based money laundering?
Dusting
Tokenization
Transaction clustering and taint analysis
Chain hopping and proof-of-stake validation
20
Structuring is a legal way to avoid tax reporting.
False
True
21
Which of the following best describes the beneficial owner under FATF guidelines?
The natural person(s) who ultimately owns or controls the legal entity
The legal owner listed on the company's registration
The person who manages day to day operations of a company
The nominee director appointed by a trust
22
Which of the following is a primary objective of model validation under an effective model risk management framework?
To optimize return on investment for machine learning models
To assess whether the model meets its intended business purpose, and inputs
To verify the financial viability of outsourcing model components
To reduce the number of compliance checks for automated decisions
23
Which money laundering typology is particularly prevalent in online gambling platforms?
Use of prepaid gift cards
Chip dumping and collusion
Structuring through ATM withdrawals
Real estate layering
24
Which sanctions circumvention tactic uses non-sanctions intermediaries to conduct transactions for sanctioned entities?
Third-party obfuscation
Mirror trading
Nested correspondent banking
Front company layering
25
Which of the following best describes the relationship between BaaS platforms and Fintech firms?
Fintech firms provide BaaS to traditional banks.
BaaS platforms offer Fintechs access to core banking services via APIs.
Fintechs use BaaS to develop blockchain-based cryptocurrencies.
BaaS platforms allow Fintechs to work independent of any banking regulation
26
The Bank Secrecy Act only applies to banks.
True
False
27
Maintaining a comprehensive model inventory with version control is a best practice in model governance documentation.
False
True
28
Money laundering usually involves three stages: placement, layering and integration.
True
False
29
The board is accountable for managing daily model inputs as part of their responsibilities in model risk governance.
True
False
30
A SAR must generally be filed within how many calendar days after detection of suspicious activity?
30
60
90
15
31
Under the 2024 Final Rule on Beneficial Ownership Reporting, which entities are exempt from reporting under the CTA?
All LLCs
Nonprofits
Foreign-owned shell companies
Publicly traded companies meeting SEC requirements
32
Which of the following is a typology involving the use of NFTs for money laundering?
Cold storage flipping
Token staking
Flash loan arbitrage
Wash trading to inflate value
33
Which factors should a bank consider when identifying its risk categories?
The bank's employee satisfaction levels.
The bank's products, services, customers and geographic locations.
The bank's marketing strategies.
The bank's technological advancements.
34
Which of the following is a challenge in sanctions screening for Fedwire messages?
Manual reconciliation
Lack of transaction volume
Real-time processing requirements
Limited data fields for screening
35
Which of the following typologies is associated with trade-based money laundering (TBML)?
Over and under invoicing of goods
Structuring of cash deposits
Use of shells companies in real estate
Use of prepaid cards
36
Under a sound model governance framework, when should model usage be restricted or supplemented?
When model results align with internal limits
During holiday periods when volume is low
Only after a regulatory citation
If the model has known limitations or failed validations
37
Which of the following is an example of a high-risk customer under AML guidelines?
Politically Exposed Person
Local school PTA account
Retired teacher with a pension
College student with a savings account
38
Employees can tell customers if a SAR has been filed about them.
True
False
39
A bank is required by law to have a written BSA/AML risk assessment.
True
False
40
When should a bank update its BSA/AML risk assessment?
Annually, regardless of changes.
When there are changes in products, services, or geographic locations.
Every 5 years.
Only when instructed by regulators.
41
What is a key compliance challenge for prepaid card programs involving third party program managers?
Inconsistent branding
High marketing costs
Lack of customer interest
Fragmented oversight and due diligence requirements
42
Which Federal Agency enforces OFAC regulations?
SEC
FBI
US Treasury Department
FinCEN
43
Virtual Asset Service Providers must file a SAR within 30 days of initially detecting facts of a suspicious transaction.
False
True
44
All employees at a financial institution must receive AML training at least annually.
False
True
45
A financial institution is required to file a SAR even if the suspicious activity involves an employee.
False
True
46
One potential risk of TPPP relationships is:
Reduced interest income from loans
Dilution of branding between Fintechs and banks
Unclear customer identification responsiblities
Enhanced liquidity from non traditional lenders
47
Which one of these is not considered one of the 5 pillars of AML Compliance?
Independent testing
Customer Due Diligence
Internal Policies
Employee training
Sanctions Screening Procedure
48
What is the primary purpose of the Bank Secrecy Act?
To detect and prevent money laundering
To track tax evasion
To regulate stock trading
To prevent identity theft
49
Which advanced analytics technique is increasingly used to detect synthetic identities in AML systems?
Time-series forecasting
Entity resolution with graph analytics
Regression analysis
Linear discriminant analysis
50
Which of the following is a not a typical service provided by a BaaS platform?
Cloud infrastructure provisioning
Transaction monitoring
Compliance support
Account onboarding
