A user has a hardware wallet that was factory reset. The user has the original 24-word recovery phrase written on a piece of paper. What is the correct way to restore access to the funds?

Initialize the hardware wallet with the recovery phrase and follow the device's restore procedure

Reinstall the wallet software and use the device's built-in backup file

Contact the hardware wallet manufacturer to recover the private keys from the device's serial number

Use the recovery phrase to create a new wallet with a different derivation path

A financial institution is subject to regulations that require it to maintain audit trails for all cryptocurrency transactions and to demonstrate that private keys are protected against unauthorized access. The institution is considering using a hardware wallet for cold storage. Which additional measure is necessary to meet the regulatory requirement for an audit trail?

Encrypt the hardware wallet's backup seed phrase with a company-wide password

Use a multi-signature wallet with keys held by different executives

Implement a process to log every transaction signing request, including the approver, timestamp, and transaction details

Store the hardware wallet in a bank vault with dual control

When restoring a wallet from a backup, what information is typically required?

The mnemonic phrase and optionally a passphrase

The transaction history of the wallet

The wallet's encryption password only

What is a key characteristic of a hierarchical deterministic (HD) wallet?

It uses a single private key for all addresses.

It requires a new seed for each transaction.

It stores keys on a hardware device only.

It derives a tree of keys from a single master seed.

Which mitigation strategy is most effective against malware that attempts to steal private keys from a software wallet?

Regularly changing the wallet's address

Using a strong password for the wallet file

Using a hardware wallet to sign transactions offline

Storing the private key in a cloud backup service

EC-CouncilBlockchain Business Leader Certification

Domain 2Objective 3

Blockchain Wallets and Key Management Techniques BBLC Practice Questions (Page 3)

Part of the Cryptography and Security in Blockchain domain, which makes up ~13% of our current practice bank.

49questions here

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Questions 11–15

11application · medium
A user has a hardware wallet that was factory reset. The user has the original 24-word recovery phrase written on a piece of paper. What is the correct way to restore access to the funds?
Select an answer first
12expert · hard
A financial institution is subject to regulations that require it to maintain audit trails for all cryptocurrency transactions and to demonstrate that private keys are protected against unauthorized access. The institution is considering using a hardware wallet for cold storage. Which additional measure is necessary to meet the regulatory requirement for an audit trail?
Select an answer first
13foundation · easy
When restoring a wallet from a backup, what information is typically required?
Select an answer first
14foundation · easy
What is a key characteristic of a hierarchical deterministic (HD) wallet?
Select an answer first
15foundation · easy
Which mitigation strategy is most effective against malware that attempts to steal private keys from a software wallet?
Select an answer first

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