Practice Test Geeks(CCE) Certified Cryptocurrency Expert Practice Test
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Initial Coin Offerings (ICOs) Flashcards

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  1. Which regulatory body issued the 2017 'DAO Report' that significantly impacted ICO regulation in the United States?

    Answer: SEC

    The SEC issued the 2017 DAO Report, concluding that DAO tokens were securities and establishing that the Howey Test applies to token sales.

  2. In ICO terminology, what is a 'hard cap'?

    Answer: The maximum total amount of funds an ICO aims to raise

    The hard cap is the maximum amount of funds an ICO will accept; once reached, no additional contributions are accepted.

  3. What distinguishes a 'utility token' from a 'security token' in the context of ICOs?

    Answer: Utility tokens grant access to a product or service rather than representing an investment contract

    Utility tokens provide access to a platform's functionality, while security tokens represent an investment expecting profits from others' efforts.

  4. What is 'vesting' in the context of ICO token distribution to founders and team members?

    Answer: A schedule that releases tokens to insiders gradually over a defined period

    Vesting schedules release tokens to founders and team members over time (often 1-4 years) to align incentives and prevent immediate dumping.

  5. Which document in an ICO provides the technical specifications and detailed description of the project's blockchain technology?

    Answer: White paper

    The white paper outlines the project's technical design, token economics, use cases, and roadmap for potential investors.

  6. What is a 'KYC/AML' process in ICOs, and why is it important?

    Answer: Know Your Customer / Anti-Money Laundering — verifies participant identities to prevent financial crimes

    KYC/AML procedures verify investor identities and screen for illicit funds, helping ICOs comply with financial regulations and prevent money laundering.

  7. What happened to many ICOs that raised funds from US investors without registering with the SEC, starting around 2018?

    Answer: Many faced SEC enforcement actions, fines, and were required to return funds to investors

    The SEC pursued enforcement actions against numerous ICOs for unregistered securities offerings, requiring many to pay penalties and refund investors.