Regulatory Compliance and Legal Frameworks in Blockchain BBLC Practice Questions (Page 3)

Questions 11–15

1. 11expert · hard

   A global cryptocurrency exchange is facing conflicting AML regulations: the EU requires enhanced due diligence for transactions above €1,000, while a Southeast Asian jurisdiction requires reporting all transactions above $500. The exchange operates in both regions. What is the most appropriate compliance approach?

   • AUse a risk-based approach that ignores the thresholds and focuses on transaction patterns.
   • BApply the stricter threshold uniformly across all jurisdictions to ensure compliance with the highest standard.
   • CApply the lower threshold only to customers from high-risk jurisdictions.
   • DApply the EU threshold in the EU and the $500 threshold in Southeast Asia to minimize friction.
   Reveal Solution Discussion Select an answer first
2. 12application · medium

   A company issues a token that represents ownership in a real estate property. The token is sold to investors and pays dividends from rental income. How is this token most likely classified under U.S. law?

   • AAs a commodity, because it is a digital asset.
   • BAs a security, because it represents an investment contract with an expectation of profits from the efforts of others.
   • CAs a utility token, because it provides ownership rights.
   • DAs a currency, because it can be traded on exchanges.
   Reveal Solution Discussion Select an answer first
4. 13application · medium

   A decentralized autonomous organization (DAO) operates a lending protocol with users in over 50 countries. The DAO has no formal legal entity. A regulator in one country issues a cease-and-desist order against the DAO for operating without a license. Which action is most likely to be effective for the DAO?

   • AEngage with the regulator and explore obtaining a license or restructuring as a legal entity.
   • BImmediately shut down the protocol to avoid further scrutiny.
   • CIgnore the order because the DAO is decentralized and has no physical presence.
   • DRelocate the DAO's servers to a country with no crypto regulations.
   Reveal Solution Discussion Select an answer first
5. 14application · medium

   A blockchain startup plans to offer security tokens to accredited investors in multiple jurisdictions. The startup wants to design a compliance framework that meets regulatory requirements. Which combination of measures is most appropriate?

   • ALimit the offering to a single jurisdiction to simplify compliance.
   • BIssue the tokens as utility tokens to avoid securities regulations.
   • CImplement investor accreditation checks, jurisdiction-specific restrictions, and ongoing reporting obligations.
   • DUse a public blockchain and rely on smart contract code to enforce all restrictions.
   Reveal Solution Discussion Select an answer first
6. 15foundation · easy

   Under current U.S. law, which of the following digital assets is most commonly classified as a commodity rather than a security?

   • AA stablecoin backed by fiat currency
   • BA governance token that grants voting rights but no profit-sharing
   • CA token sold in an ICO that promises profits from the issuer's efforts
   • DBitcoin (BTC)
   Reveal Solution Discussion Select an answer first