Regulatory Compliance & Risk Management Flashcards
6 cards from real Blockchain Technology practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Regulatory Compliance & Risk Management flashcards as text
Why is KYC (Know Your Customer) important in blockchain applications?
Answer: To ensure compliance and prevent financial crimes
KYC helps prevent illicit activities such as money laundering by verifying the identity of participants in blockchain-based systems.
What is the role of GDPR in blockchain regulation?
Answer: It governs how personal data is handled
GDPR enforces rules on how personal data is stored and accessed, posing challenges for immutable blockchain records.
Which of the following is a risk management practice in blockchain?
Answer: Auditing smart contracts
Smart contract auditing helps identify and resolve vulnerabilities before deployment, reducing security risks.
What is the purpose of a compliance framework in blockchain development?
Answer: To enforce data privacy and legal standards
A compliance framework ensures that blockchain systems meet legal and ethical standards, preventing regulatory violations.
How can blockchain developers reduce the risk of regulatory non-compliance?
Answer: Consult legal experts
Engaging legal experts during development ensures the solution aligns with regional and global compliance standards.
Why is risk assessment essential before launching a blockchain product?
Answer: To identify and mitigate vulnerabilities
Risk assessment identifies potential legal, operational, and financial threats, allowing for proactive mitigation.