Risk Management Strategies and Compliance Mechanisms in Blockchain BBLC Practice Questions (Page 8)

Questions 36–40

1. 36application · medium

   A European company is building a blockchain-based loyalty program that stores customer purchase history. They must comply with GDPR, including the right to erasure. Which design approach best balances GDPR compliance with blockchain immutability?

   • AStore only hashes of personal data on-chain and keep the actual data off-chain in an encrypted database
   • BUse a private blockchain and claim GDPR does not apply because it is not public
   • CEncrypt personal data on-chain and delete the encryption key when erasure is requested
   • DStore all personal data on-chain and rely on the blockchain's transparency to demonstrate compliance
   Reveal Solution Discussion Select an answer first
2. 37application · medium

   A digital identity platform is built on a blockchain and must comply with KYC/AML regulations. They need to ensure that only verified users can transact. Which compliance mechanism should they implement?

   • AStore all user identity documents on-chain for transparency
   • BRequire a verified credential to be presented and validated by the smart contract before any transaction
   • CUse a public blockchain so that all transactions are visible to regulators
   • DRely on users to self-certify their identity
   Reveal Solution Discussion Select an answer first
4. 38expert · hard

   A bank is considering a blockchain for cross-border payments. The risk team has identified two risks: (A) regulatory fines for non-compliance with sanctions, and (B) reputational damage from a data breach. They have limited budget for risk mitigation. Which risk should they prioritize for mitigation?

   • ABoth equally, because any risk is unacceptable
   • BReputational damage, because it can affect customer trust and long-term revenue
   • CNeither, because blockchain is inherently compliant and secure
   • DRegulatory fines, because they have a direct financial impact and can be quantified
   Reveal Solution Discussion Select an answer first
5. 39foundation · easy

   Which of the following is an example of a compliance rule that can be encoded in a smart contract?

   • AEnsuring that all nodes use the same consensus algorithm
   • BGuaranteeing that the blockchain network has no downtime
   • CRequiring that a transaction amount does not exceed a certain threshold
   • DEnsuring that the contract code is written in a specific programming language
   Reveal Solution Discussion Select an answer first
6. 40foundation · easy

   Under GDPR, what is a key challenge when storing personal data on a public blockchain?

   • AThe right to erasure conflicts with blockchain's immutability
   • BPublic blockchains are not transparent enough
   • CGDPR requires all data to be stored on-premises
   • DThe blockchain cannot encrypt data
   Reveal Solution Discussion Select an answer first