Risk Management in Blockchain Finance BFC Practice Questions (Page 7)

Questions 31–35

1. 31foundation · easy

   Which operational risk is specific to centralized blockchain financial services, such as cryptocurrency exchanges, due to their reliance on a single entity to manage funds?

   • A51% attack
   • BCustodial risk
   • CConsensus failure
   • DFork risk
   Reveal Solution Discussion Select an answer first
2. 32expert · hard

   A decentralized autonomous organization (DAO) manages a large treasury and wants to establish a risk monitoring and reporting mechanism. The DAO is concerned about both governance attacks and smart contract vulnerabilities. Which combination of metrics would provide the MOST comprehensive early warning?

   • AGas fees on the network and block time.
   • BNumber of active community members and social media sentiment.
   • CToken price volatility and trading volume on exchanges.
   • DVoting power concentration, number of large token transfers, and frequency of smart contract upgrades.
   Reveal Solution Discussion Select an answer first
4. 33foundation · easy

   Which risk category in blockchain finance is most directly associated with the potential loss of private keys or the compromise of cryptographic algorithms?

   • ASmart contract risk
   • BCryptographic risk
   • CMarket risk
   • DCompliance risk
   Reveal Solution Discussion Select an answer first
5. 34application · medium

   A crypto lending platform is evaluating the risk of a flash loan attack on its smart contracts. They have historical data on similar attacks in the industry. Which risk assessment method would be MOST appropriate to quantify the potential loss?

   • AUse a quantitative method that calculates the expected loss based on the probability and impact of the attack.
   • BUse a checklist to identify potential vulnerabilities without quantifying the loss.
   • CUse a qualitative method that assigns a risk rating based on expert judgment.
   • DUse a scenario analysis that considers only the worst-case outcome.
   Reveal Solution Discussion Select an answer first
6. 35expert · hard

   A blockchain-based remittance service is required by regulators to report suspicious transactions within 24 hours. The service currently relies on manual review of alerts generated by its monitoring system. The volume of alerts is high, and the team often misses the 24-hour deadline. What is the best improvement to meet the regulatory requirement?

   • AIgnore low-value alerts to focus on high-value ones.
   • BIncrease the threshold for alerts to reduce the volume.
   • CHire more compliance officers to manually review all alerts.
   • DAutomate the triage of alerts using a rules-based system that prioritizes high-risk alerts and escalates them to compliance officers.
   Reveal Solution Discussion Select an answer first