CCE Regulatory and Legal Frameworks 4

Question 1

What is 'AML' and why is it critical for cryptocurrency compliance?

Accepted Answer

Anti-Money Laundering — prevents criminals from disguising illicit funds as crypto gains

Answer

AML (Anti-Money Laundering) refers to laws and procedures preventing criminals from disguising illegally obtained funds as legitimate income through crypto transactions.

Question 2

Which Wyoming law was groundbreaking for allowing banks to hold cryptocurrency as custodians?

Accepted Answer

Wyoming SPDI (Special Purpose Depository Institution) statute

Answer

Wyoming's SPDI statute created a new bank charter type allowing institutions to provide crypto custody services without FDIC insurance requirements.

Question 3

Under GDPR, what challenge does public blockchain data present?

Accepted Answer

The immutability of blockchain conflicts with the 'right to be forgotten'

Answer

GDPR's right to erasure (right to be forgotten) conflicts with blockchain's immutability, since personal data written to a public blockchain cannot be deleted.

Question 4

What is a 'VASP' as defined by FATF?

Accepted Answer

Virtual Asset Service Provider — businesses offering crypto exchange or transfer services

Answer

A VASP (Virtual Asset Service Provider) is any business conducting virtual asset exchange, transfer, or custody services, subject to FATF's AML/CFT recommendations.

Question 5

In the SEC's view, which of the following factors suggests a cryptocurrency is NOT a security?

Accepted Answer

It is sufficiently decentralized with no central team driving its value

Answer

SEC officials including former Director William Hinman suggested that sufficiently decentralized networks like Bitcoin may not be securities because no central enterprise drives investor returns.

(CCE) Certified Cryptocurrency Expert Practice Test

(CCE) Certified Cryptocurrency Expert Practice Test

CCE Regulatory and Legal Frameworks 4