Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

Emerging technologies can affect money laundering by...

1. Making transactions slower and more costly

2. Introducing new methods to hide illicit activities

3. Reducing the need for regulations

4. Facilitating transparent financial practices

The correct answer is: Introducing new methods to hide illicit activities

Emerging technologies play a significant role in the evolution of money laundering methods. The correct choice highlights that these technologies often introduce new tools and platforms that can be manipulated to obscure the origins of illicit funds. For instance, advancements like cryptocurrency, blockchain technology, and online payment systems can create a veil of anonymity, which money launderers exploit to obscure the traceability of financial transactions. These technologies can enable sophisticated techniques for layering and integrating illicit funds, making it more challenging for authorities to detect and investigate suspicious activities. Additionally, the use of encrypted communications and privacy-focused digital currencies adds complexity to the enforcement of anti-money laundering regulations. Thus, the introduction of these innovative technologies creates a landscape where criminals can effectively hide their activities, necessitating a continuous evolution of regulatory responses and compliance measures within financial systems.