Module: General Practice
Q103: The inclusion of Virtual Digital Assets (VDAs) under the PMLA framework has introduced specific compliance mandates. Which of the following statements accurately describe the regulations regarding "Reporting Entities" in the crypto sector?
Entities facilitating the exchange between VDAs and fiat currencies, or the transfer/safekeeping of VDAs, are classified as Reporting Entities and must register with the FIU-IND.
Under the "Travel Rule," Beneficiary VASPs (Virtual Asset Service Providers) are obligated to verify beneficiary information and screen the originator's wallet address against sanctions lists for transactions exceeding the prescribed threshold.
"Crypto Mixers" or "Tumblers" are considered high-risk services because they obfuscate the audit trail on the blockchain by mixing funds from multiple users, making it difficult to trace the original source of funds.
Individuals holding VDAs in personal unhosted "cold wallets" for long-term investment are automatically classified as Reporting Entities and must file monthly transaction reports.
Under the "Travel Rule," Beneficiary VASPs (Virtual Asset Service Providers) are obligated to verify beneficiary information and screen the originator's wallet address against sanctions lists for transactions exceeding the prescribed threshold.
"Crypto Mixers" or "Tumblers" are considered high-risk services because they obfuscate the audit trail on the blockchain by mixing funds from multiple users, making it difficult to trace the original source of funds.
Individuals holding VDAs in personal unhosted "cold wallets" for long-term investment are automatically classified as Reporting Entities and must file monthly transaction reports.
✅ Correct Answer: B
The correct answer is Option B. VASPs are REs.
The Travel Rule applies to crypto.
Mixers are high risk.
Individuals with cold wallets are not REs, making statement 4 incorrect.
Crypto regulations are new to the IIBF AML KYC Exam 2026.
The Travel Rule applies to crypto.
Mixers are high risk.
Individuals with cold wallets are not REs, making statement 4 incorrect.
Crypto regulations are new to the IIBF AML KYC Exam 2026.