Risk Management in Blockchain Finance BFC Practice Questions (Page 1)

Questions 1–5

1. 1foundation · easy

   In blockchain risk management, what is the purpose of a risk register?

   • ATo execute smart contracts automatically
   • BTo replace the need for insurance
   • CTo document identified risks, their assessments, and mitigation actions
   • DTo store private keys securely
   Reveal Solution Discussion Select an answer first
2. 2expert · hard

   A global crypto exchange is expanding into a country with strict data localization laws. The exchange currently stores all customer data in a cloud region outside that country. The exchange also uses a public blockchain for transaction records. What is the most significant compliance risk, and what is the best mitigation?

   • AData residency violation; move customer data storage to a cloud region within the country.
   • BBlockchain immutability conflict with data privacy; use a private blockchain with restricted access.
   • CCybersecurity risk; add additional encryption to all stored data.
   • DAML reporting failure; implement a new transaction monitoring system.
   Reveal Solution Discussion Select an answer first
4. 3foundation · easy

   In a blockchain-based financial system, which risk arises specifically from the automated execution of contractual terms encoded on the blockchain?

   • ALiquidity risk
   • BCryptographic risk
   • COperational risk
   • DSmart contract risk
   Reveal Solution Discussion Select an answer first
5. 4foundation · easy

   What is the primary goal of a business continuity plan (BCP) in a blockchain financial operation?

   • ATo maximize profits during normal operations
   • BTo replace the need for cybersecurity measures
   • CTo ensure critical functions continue during and after a disruption
   • DTo guarantee no financial loss ever occurs
   Reveal Solution Discussion Select an answer first
6. 5application · medium

   A fintech startup is launching a DeFi lending protocol. The smart contract code has been audited, but the team is concerned about the risk of a critical vulnerability being exploited before a patch can be deployed. They have a multi-signature wallet for the admin functions. What additional control would most directly reduce the financial impact of a potential exploit?

   • AIncrease the number of required signatures on the admin multi-signature wallet.
   • BPublish the audit report publicly to increase transparency.
   • CDeploy the protocol on a testnet for a longer period.
   • DPurchase a smart contract insurance policy that covers losses from code exploits.
   Reveal Solution Discussion Select an answer first