CBE Blockchain Governance and Regulatory Compliance 2 — Questions and Answers
Question 1: What US executive order, issued in 2022, directed federal agencies to coordinate on digital asset regulation?
- EO 14067 — Ensuring Responsible Development of Digital Assets (Correct answer)
- EO 13772 — Core Principles for Financial Regulation
- EO 14028 — Cybersecurity Improvements
- EO 13849 — Economic Stabilization
Correct answer: EO 14067 — Ensuring Responsible Development of Digital Assets
EO 14067, signed by President Biden in March 2022, directed agencies to study risks and develop a coordinated US digital asset strategy.
Question 2: Which concept describes a blockchain protocol where stakeholders can delegate their voting power to trusted representatives?
- Delegated Proof of Stake (DPoS) (Correct answer)
- Proof of Work (PoW)
- Proof of Authority (PoA)
- Proof of Space
Correct answer: Delegated Proof of Stake (DPoS)
DPoS allows token holders to delegate their stake to elected delegates who validate transactions and vote on protocol changes on their behalf.
Question 3: What is the Travel Rule requirement as applied to cryptocurrency transactions in the US?
- VASPs must share sender and recipient identifying information for transfers above $3,000 (Correct answer)
- All crypto transactions must be reported to the IRS regardless of amount
- Exchanges must block international transfers above $10,000
- Miners must verify identities before adding transactions to blocks
Correct answer: VASPs must share sender and recipient identifying information for transfers above $3,000
FinCEN's Travel Rule requires Virtual Asset Service Providers (VASPs) to transmit identifying information on transfers of $3,000 or more.
Question 4: Which type of DAO structure gives voting weight proportional to the number of governance tokens held?
- Token-weighted voting (Correct answer)
- Quadratic voting
- One-person-one-vote
- Reputation-based voting
Correct answer: Token-weighted voting
Token-weighted voting means larger token holders have proportionally more influence, which is common but criticized for plutocratic tendencies.
Question 5: What regulatory challenge is unique to decentralized finance (DeFi) compared to centralized exchanges?
- Lack of a central intermediary that can be held legally responsible (Correct answer)
- Excessive KYC requirements that slow transactions
- Mandatory government audits on all smart contracts
- Requirement to hold 100% reserves
Correct answer: Lack of a central intermediary that can be held legally responsible
DeFi protocols operate via autonomous smart contracts with no central party, making it difficult for regulators to enforce compliance obligations.
Question 6: What does the CFTC regulate in the cryptocurrency space?
- Crypto derivatives and futures contracts, classifying Bitcoin and Ether as commodities (Correct answer)
- All cryptocurrency spot markets and ICOs
- Central bank digital currencies (CBDCs)
- Stablecoin reserves and audits
Correct answer: Crypto derivatives and futures contracts, classifying Bitcoin and Ether as commodities
The CFTC has jurisdiction over crypto derivatives markets and has designated Bitcoin and Ether as commodities under the Commodity Exchange Act.
CBE Blockchain Governance and Regulatory Compliance 2
What US executive order, issued in 2022, directed federal agencies to coordinate on digital asset regulation?