CBP Legal, Compliance, and Economic Implications of Bitcoin 3

Question 1

Which country was the first to adopt Bitcoin as official legal tender?

Accepted Answer

El Salvador

Answer

El Salvador became the first country in the world to adopt Bitcoin as legal tender in September 2021 under the Bitcoin Law.

Question 2

What is 'regulatory arbitrage' in the context of Bitcoin businesses?

Accepted Answer

Relocating or structuring operations to take advantage of more favorable regulatory jurisdictions

Answer

Regulatory arbitrage occurs when businesses locate or structure themselves in jurisdictions with lighter regulatory burdens to reduce compliance costs.

Question 3

Under U.S. securities law, which test is primarily used to determine whether a Bitcoin-related token is a security?

Accepted Answer

The Howey Test

Answer

The Howey Test determines whether an asset is an investment contract (and thus a security) based on whether it involves an investment of money in a common enterprise with profits expected from the efforts of others.

Question 4

What is the significance of the FATF (Financial Action Task Force) guidelines for Bitcoin businesses globally?

Accepted Answer

FATF recommendations influence how member countries regulate virtual asset service providers

Answer

FATF issues non-binding recommendations that member states are expected to implement, significantly shaping how countries regulate virtual asset service providers (VASPs).

Question 5

Which economic principle describes Bitcoin's fixed supply cap of 21 million coins as a deflationary feature?

Accepted Answer

Sound money / hard money principle

Answer

Bitcoin's fixed supply cap embodies the 'hard money' or 'sound money' principle, meaning its supply cannot be inflated by any authority, unlike fiat currencies.

(CBP) Certified Bitcoin Professional Practice Test

(CBP) Certified Bitcoin Professional Practice Test

CBP Legal, Compliance, and Economic Implications of Bitcoin 3