CBCP Blockchain Governance and Regulation Flashcards

Which type of blockchain governance model relies on token holders voting directly on protocol changes?

Answer: On-chain governance

On-chain governance embeds the voting and decision-making process directly into the blockchain protocol, allowing token holders to vote on proposed changes.

What is a DAO (Decentralized Autonomous Organization) primarily governed by?

Answer: Smart contracts and token-based voting

A DAO is governed by smart contracts and token-based voting, allowing stakeholders to propose and vote on decisions without centralized control.

In blockchain governance, what is a 'hard fork' typically used to address?

Answer: Major protocol upgrades or fundamental rule changes

A hard fork implements major protocol upgrades or fundamental rule changes that are not backward-compatible, requiring all nodes to upgrade.

Which US regulatory body has primary jurisdiction over cryptocurrency exchanges operating as securities platforms?

Answer: SEC

The Securities and Exchange Commission (SEC) has primary jurisdiction over cryptocurrency exchanges that trade digital assets classified as securities.

What is the primary purpose of AML (Anti-Money Laundering) requirements for blockchain businesses in the US?

Answer: To prevent illegal funds from being disguised as legitimate assets

AML requirements are designed to prevent criminals from disguising illegally obtained funds as legitimate assets by monitoring and reporting suspicious transactions.

Which governance concept describes a blockchain network where changes require agreement from a defined subset of network participants?

Answer: Threshold governance

Threshold governance requires a predefined minimum number or percentage of participants to agree before a protocol change or transaction is approved.