CFE – Investigation — Question 49

Which of the following is the MOST ACCURATE statement regarding a fraud examiner’s ability to trace cryptocurrency transactions?

Answer options

• A. Most jurisdictions do not require digital wallet providers to record any personal information about cryptocurrency users.
• B. Cryptocurrency ownership cannot be determined through an analysis of details on a subject’s bank statements.
• C. Each blockchain transaction contains a user’s cryptographic address, which can help identify patterns that might link the user to criminal activity.
• D. Most cryptocurrencies rely on private blockchains, which allow users’ transactions to be completely anonymous and therefore difficult to trace.

Correct answer: D

Explanation

The correct answer is D because most cryptocurrencies do use private blockchains that ensure user anonymity, complicating transaction tracing. Option A is incorrect as some jurisdictions may enforce certain requirements, while B is incorrect because bank statements can provide indirect evidence of cryptocurrency transactions. Option C is misleading since it implies that all transactions can be easily linked, which is not the case with private blockchains.