Risk Management Strategies and Compliance Mechanisms in Blockchain BBLC Practice Questions (Page 7)

Questions 31–35

1. 31application · medium

   An energy trading platform is using a blockchain to settle transactions. The risk team is assessing the risk of a 51% attack on the network. They determine that the network is a small private chain with only five validators. How should they rate the likelihood of a 51% attack?

   • AMedium, because the network uses proof-of-authority which is immune to 51% attacks
   • BLow, because the validators are known and trusted institutions
   • CHigh, because with only five validators, collusion among three could control the network
   • DZero, because a private blockchain cannot be attacked
   Reveal Solution Discussion Select an answer first
2. 32application · medium

   A multinational bank is piloting a private blockchain for cross-border interbank settlements. The pilot uses a permissioned network with a small set of known validators. The bank's risk team is conducting an initial risk assessment. Which risk should be prioritized as the most likely to materialize in this pilot phase?

   • AFinancial risk from cryptocurrency price volatility affecting settlement amounts
   • BOperational risk from a single validator outage disrupting settlement finality
   • CReputational risk from public perception of blockchain's association with illicit finance
   • DLegal risk from unknown counterparty jurisdictions in the network
   Reveal Solution Discussion Select an answer first
4. 33application · medium

   A consortium of insurance companies is launching a blockchain for claims processing. To ensure ongoing compliance and risk management, they need a governance structure that can adapt to regulatory changes. Which governance model is most effective for this purpose?

   • AA multi-stakeholder governance board with representatives from each member company, empowered to update network policies and smart contract parameters.
   • BA governance structure that is fixed at launch and cannot be changed.
   • CA single company that acts as the sole administrator with full control over the network.
   • DA fully automated governance system where smart contracts make all decisions without human oversight.
   Reveal Solution Discussion Select an answer first
5. 34foundation · easy

   A risk assessment framework that evaluates risks by multiplying the likelihood of an event by its impact is commonly known as a:

   • AQualitative risk matrix
   • BRisk score calculation
   • CLikelihood-impact matrix
   • DQuantitative risk analysis
   Reveal Solution Discussion Select an answer first
6. 35application · medium

   An online marketplace is implementing a smart contract to handle seller payouts. To comply with anti-money laundering (AML) regulations, the contract must not release funds to a seller whose identity has not been verified. Which smart contract design enforces this compliance requirement?

   • AThe contract releases funds to any wallet address that has been active for more than 30 days.
   • BThe contract allows the seller to self-certify their identity by submitting a form.
   • CThe contract checks a digital identity verification status from an authorized KYC provider before releasing any payout.
   • DThe contract releases funds automatically after a 7-day holding period, assuming the seller is verified.
   Reveal Solution Discussion Select an answer first