CFE – Law — Question 9

Which of the following statements concerning digital currencies, such as bitcoin, is MOST ACCURATE?

Answer options

• A. Digital currencies are attractive to money launderers because they are a payment method that provides complete anonymity.
• B. Digital currencies are attractive to money launderers because payments often cross jurisdictional boundaries, making it difficult for authorities to pursue enforcement.
• C. Digital currencies are not typically used to launder money due to strict customer identification or recordkeeping requirements enforced in all jurisdictions.
• D. Digital currencies are subject to all of the same regulations as payments made through traditional financial institutions.

Correct answer: A

Explanation

The correct answer is A, as digital currencies can provide a level of anonymity that makes them attractive for illicit activities like money laundering. Option B, while true, emphasizes jurisdictional issues rather than anonymity, which is the key point in A. Options C and D are incorrect as they misrepresent the regulatory environment surrounding digital currencies and their use in money laundering.