CAFCA Exam 2026/2027 Certified Study
Resources with Verified Answers
1. Which three factors are most critical when conducting an ML/TF risk
assessment for a cross-border payment fintech? E) Number of employees
under age 25
A) Geographic location of all transaction endpoints
B) Geographic location of all transaction endpoints
C) Color of the company logo
D) Volume of cryptocurrency-to-fiat conversions
Answer A: , B, D
Rationale: High-risk jurisdictions, crypto exposure, and speed-to-settlement
reducing screening windows are top 2026 risk indicators.
2. Under the Corporate Transparency Act (CTA) as enforced in 2025, which
entities are generally required to report Beneficial Ownership Information
(BOI) to FinCEN?
A) Public companies traded on a major stock exchange
B) Small LLCs with no employees and minimal assets
C) Banks already subject to strict AML supervision
D) Non-profits registered with the IRS
Answer B:
,Rationale: Small LLCs are covered; public companies, banks, and large non-profits
are exempt.
3. A customer onboarding process that relies solely on a selfie and an
uploaded ID without liveness detection is vulnerable to:
A) Identity theft
B) Deepfake impersonation
C) Synthetic identity fraud
D) All of the above
Answer D:
Rationale: Deepfakes and synthetic IDs are increasingly used to bypass weak
verification.
4. Under the Travel Rule (FATF Recommendation 16) as implemented in the
US in 2025, which information must be transmitted between VASPs for a
transfer > $3,000?
A) Originating VASP's internal memo only
B) Originator name, account number, address; beneficiary name and account
number
C) Beneficiary's passport photo
D) Transaction IP address and device fingerprint
Answer B:
,Rationale: The Travel Rule requires originator and beneficiary identifying
information.
5. Which of the following are considered PEPs under the revised FATF 2025
recommendations?
A) A mid-level manager at a state-owned enterprise
B) A senior military official in a high-risk jurisdiction
C) An executive of a state-owned enterprise in a high-risk jurisdiction
D) A local government clerk
Answer B: , C
Rationale: FATF 2025 updated the definition to include state-owned enterprise
executives.
6. What is beneficial ownership?
A) The person or persons having ultimate control over the funds
B) The person who opens the account
C) The person who signs the contract
D) The person who manages the account
Answer A:
Rationale: Beneficial ownership refers to the individual(s) who ultimately own or
control a legal entity.
, 7. A wealthy individual uses a lawyer's trust account to buy real estate
without appearing on the deed. This is a red flag for:
A) Trade-based money laundering
B) Legal professional loophole
C) Smurfing
D) Shell company abuse only
Answer B:
Rationale: Lawyers' trust accounts are increasingly used to obscure ownership.
8. Which three elements are most indicative of a high-risk jurisdiction for
AML purposes?
A) Presence of terrorist financing activity
B) Lack of effective AML/CFT controls
C) Significant drug trafficking activity
D) High GDP per capita
Answer A: , B, C
Rationale: High-risk jurisdictions are characterized by weak AML controls and
illicit activity.
9. What is the difference between an Owner and a Controlling Person in
beneficial ownership?
Resources with Verified Answers
1. Which three factors are most critical when conducting an ML/TF risk
assessment for a cross-border payment fintech? E) Number of employees
under age 25
A) Geographic location of all transaction endpoints
B) Geographic location of all transaction endpoints
C) Color of the company logo
D) Volume of cryptocurrency-to-fiat conversions
Answer A: , B, D
Rationale: High-risk jurisdictions, crypto exposure, and speed-to-settlement
reducing screening windows are top 2026 risk indicators.
2. Under the Corporate Transparency Act (CTA) as enforced in 2025, which
entities are generally required to report Beneficial Ownership Information
(BOI) to FinCEN?
A) Public companies traded on a major stock exchange
B) Small LLCs with no employees and minimal assets
C) Banks already subject to strict AML supervision
D) Non-profits registered with the IRS
Answer B:
,Rationale: Small LLCs are covered; public companies, banks, and large non-profits
are exempt.
3. A customer onboarding process that relies solely on a selfie and an
uploaded ID without liveness detection is vulnerable to:
A) Identity theft
B) Deepfake impersonation
C) Synthetic identity fraud
D) All of the above
Answer D:
Rationale: Deepfakes and synthetic IDs are increasingly used to bypass weak
verification.
4. Under the Travel Rule (FATF Recommendation 16) as implemented in the
US in 2025, which information must be transmitted between VASPs for a
transfer > $3,000?
A) Originating VASP's internal memo only
B) Originator name, account number, address; beneficiary name and account
number
C) Beneficiary's passport photo
D) Transaction IP address and device fingerprint
Answer B:
,Rationale: The Travel Rule requires originator and beneficiary identifying
information.
5. Which of the following are considered PEPs under the revised FATF 2025
recommendations?
A) A mid-level manager at a state-owned enterprise
B) A senior military official in a high-risk jurisdiction
C) An executive of a state-owned enterprise in a high-risk jurisdiction
D) A local government clerk
Answer B: , C
Rationale: FATF 2025 updated the definition to include state-owned enterprise
executives.
6. What is beneficial ownership?
A) The person or persons having ultimate control over the funds
B) The person who opens the account
C) The person who signs the contract
D) The person who manages the account
Answer A:
Rationale: Beneficial ownership refers to the individual(s) who ultimately own or
control a legal entity.
, 7. A wealthy individual uses a lawyer's trust account to buy real estate
without appearing on the deed. This is a red flag for:
A) Trade-based money laundering
B) Legal professional loophole
C) Smurfing
D) Shell company abuse only
Answer B:
Rationale: Lawyers' trust accounts are increasingly used to obscure ownership.
8. Which three elements are most indicative of a high-risk jurisdiction for
AML purposes?
A) Presence of terrorist financing activity
B) Lack of effective AML/CFT controls
C) Significant drug trafficking activity
D) High GDP per capita
Answer A: , B, C
Rationale: High-risk jurisdictions are characterized by weak AML controls and
illicit activity.
9. What is the difference between an Owner and a Controlling Person in
beneficial ownership?
