Practice Test Geeks(CCE) Certified Cryptocurrency Expert Practice Test
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Regulatory & Legal Framework Flashcards

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  1. Which Wyoming law, enacted in 2019, created a new type of bank charter specifically designed to serve cryptocurrency businesses?

    Answer: Special Purpose Depository Institution (SPDI) Act

    Wyoming's Special Purpose Depository Institution (SPDI) Act created a new bank charter allowing crypto-focused institutions to hold digital assets and provide financial services without FDIC insurance.

  2. Under the EU's Anti-Money Laundering Directive (AMLD5), which entities were first brought under AML obligations in 2020?

    Answer: Cryptocurrency exchanges and custodian wallet providers

    AMLD5 extended AML/CTF obligations to crypto-to-fiat exchanges and custodian wallet providers for the first time across EU member states.

  3. What is the significance of the SEC's 'Regulation D exemption' for many cryptocurrency token sales in the US?

    Answer: It allows securities offerings to be sold to accredited investors without full SEC registration

    Regulation D (particularly Rule 506(b) and 506(c)) allows token issuers to raise capital from accredited investors without registering the offering with the SEC, a common structure for SAFTs.

  4. Which US enforcement action established that unregistered ICO tokens sold to the public likely constitute unregistered securities offerings?

    Answer: SEC v. Telegram Group (2020)

    In SEC v. Telegram (2020), the court found that Telegram's $1.7 billion Gram token sale was an unregistered securities offering, and Telegram returned funds to investors.

  5. Under FATF standards, what risk-based approach element must VASPs apply when determining how to monitor customers?

    Answer: Allocate compliance resources proportional to the assessed risk level of each customer

    FATF's risk-based approach requires VASPs to perform enhanced due diligence on higher-risk customers and simplified due diligence on lower-risk customers, allocating resources proportionally.

  6. What is the legal concept of 'piercing the corporate veil' as it applies to DAO liability?

    Answer: Imposing personal liability on DAO token holders if the DAO lacks proper legal structure

    Without a recognized legal structure, courts may pierce the corporate veil and hold DAO participants personally liable for the DAO's debts and obligations.

  7. Which OFAC designation category would apply to a cryptocurrency mixer used by sanctioned North Korean hackers?

    Answer: Specially Designated National (SDN)

    OFAC added Tornado Cash to the SDN list in 2022, designating it as a Specially Designated National, prohibiting US persons from transacting with it.