Regulatory Compliance and Legal Frameworks in Blockchain BBLC Practice Questions (Page 9)

Questions 41–45

1. 41foundation · easy

   Which of the following is a common AML/CTF obligation for a cryptocurrency exchange?

   • ARegistering with the local chamber of commerce
   • BProviding customers with a private key for their wallets
   • CEnsuring that all customers are accredited investors
   • DMonitoring transactions for suspicious activity and reporting it to authorities
   Reveal Solution Discussion Select an answer first
2. 42application · medium

   Two companies in different countries execute a smart contract for the supply of goods. The contract code runs automatically, but a dispute arises over whether the code accurately reflects the parties' original agreement. What is the most important factor in determining the smart contract's legal enforceability?

   • AWhether the smart contract code is written in Solidity, because only Solidity contracts are recognized by courts.
   • BWhether the smart contract includes a kill switch, because without one it cannot be legally terminated.
   • CWhether the smart contract is deployed on a public blockchain, because only public blockchains create legally binding agreements.
   • DWhether the parties clearly expressed mutual assent to be bound by the code's terms, including any off-chain documentation.
   Reveal Solution Discussion Select an answer first
4. 43application · medium

   An artist sells a limited-edition NFT representing digital artwork. The NFT includes a smart contract that gives the artist a 10% royalty on every secondary sale. A buyer in another country resells the NFT on a global marketplace. Which legal issue is most likely to arise?

   • AThe NFT is automatically classified as a security because it has a royalty feature.
   • BThe artist loses all copyright to the artwork when the NFT is sold.
   • CThe cross-border sale is illegal because NFTs are not recognized in the buyer's jurisdiction.
   • DThe royalty may not be enforceable if the marketplace does not honor the smart contract's royalty mechanism.
   Reveal Solution Discussion Select an answer first
5. 44application · medium

   A healthcare consortium uses a permissioned blockchain to share patient data among hospitals. The blockchain stores hashes of patient records on-chain, while the actual records are stored off-chain. A patient requests deletion of their data under GDPR. What is the most effective way to comply?

   • ARewrite the blockchain to remove the hash, since the consortium controls the network.
   • BIgnore the request because hashes are not personal data.
   • CStore the deletion request on-chain to prove compliance.
   • DDelete the off-chain records and ensure the on-chain hash cannot be linked to the patient, such as by using a keyed hash and removing the mapping.
   Reveal Solution Discussion Select an answer first
6. 45expert · hard

   A global crypto exchange operates in multiple jurisdictions with differing AML/CTF requirements. One jurisdiction requires transaction monitoring for amounts above €1,000, while another requires monitoring for all transactions. The exchange wants to implement a single global compliance program. Which approach best balances compliance and operational efficiency?

   • AApply the strictest monitoring threshold across all jurisdictions.
   • BUse the lowest threshold globally to reduce false positives.
   • CMonitor only transactions that cross international borders.
   • DImplement separate monitoring systems for each jurisdiction.
   Reveal Solution Discussion Select an answer first