Free CKYCA sample questions

Correct answer: The trustee, the settlor, and the beneficiaries of the Trust in Layer 3.

In complex structures involving trusts, the Ultimate Beneficial Owner (UBO) is not just the legal owner (the trustee) but also the settlor, the protector (if any), the beneficiaries, and any natural person exercising ultimate control over the trust. Identifying these individuals is crucial to understanding who ultimately controls or benefits from the corporate vehicle.

Correct answer: It suggests the company is a shell company designed to obscure physical presence.

While virtual offices are legitimate for modern businesses, they are a known red flag for shell companies used for money laundering because they provide a mailing address without a physical footprint. The analyst must verify if the lack of physical presence aligns with the business model (e.g., software development) or if it is an attempt to hide operations.

Correct answer: An unexpired government-issued ID bearing a photograph and a recent utility bill.

The gold standard for documentary verification is an unexpired government-issued identification (like a passport or driver's license) that includes a photograph to verify identity, combined with a secondary document like a recent utility bill or bank statement to verify the residential address.

Correct answer: High Risk

Even though the geography (Switzerland) is low risk, the combination of Customer Type (Non-Profit Organization, often considered higher risk for terrorist financing) and Product (Wire Transfers, high velocity/volume) elevates the Inherent Risk. Most risk models default to the highest risk factor present (the 'High Water Mark' principle) or use a weighted average that would push this into the High category due to 2 out of 3 factors being high.

Correct answer: The system fails to flag a sanctioned entity; the institution proceeds to do business with a prohibited party.

A False Negative occurs when the screening system misses a true match (e.g., due to poor fuzzy matching logic or data quality issues). This is the most dangerous outcome because the institution unwittingly processes transactions for a sanctioned entity, leading to potential regulatory fines, legal action, and severe reputational damage.

Correct answers: Transaction history from a reputable crypto exchange showing initial fiat deposits and subsequent trading profits.; Tax returns declaring capital gains from digital asset disposal for the relevant years.

Exchange records provide a clear audit trail of the investment lifecycle: the initial fiat entry (source of funds for investment) and the trading activity that generated the capital gain (source of wealth).

Official tax returns are strong independent verification that the wealth was declared to authorities, lending legitimacy to the claim.