Crypto Trading Security and Risk 4

Question 1

What is a 'dusting attack'?

Accepted Answer

Sending tiny amounts of crypto to wallets to track and de-anonymize their owners

Answer

Attackers send minuscule 'dust' to many addresses, then analyze movement to link wallets to identities.

Question 2

A position size of 50% of your portfolio in one volatile altcoin best illustrates what risk problem?

Accepted Answer

Over-concentration and poor risk management

Answer

Allocating too much to one volatile asset exposes the whole portfolio to a single coin's swings.

Question 3

What does a stop-loss order help a trader manage?

Accepted Answer

Downside risk by automatically selling at a preset price

Answer

A stop-loss caps losses by triggering a sale once the price falls to a defined level.

Question 4

Why should you be cautious of crypto projects promising 'guaranteed high returns'?

Accepted Answer

Guaranteed high returns are a classic hallmark of scams and Ponzi schemes

Answer

No legitimate investment guarantees high returns; such promises typically signal fraud.

Question 5

What is the purpose of a multi-signature (multisig) wallet?

Accepted Answer

To require multiple approvals before funds can move

Answer

Multisig requires several keys to authorize a transaction, reducing single-point-of-failure theft.

Crypto Trading Practice Test