Security and Regulatory Compliance Flashcards
7 cards from real Cryptocurrency practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Security and Regulatory Compliance flashcards as text
What is a '51% attack' in cryptocurrency networks?
Answer: When a single entity controls more than half of the network's mining hash rate
A 51% attack occurs when one entity controls the majority of mining power, allowing them to double-spend coins or reverse transactions.
Which U.S. agency primarily regulates cryptocurrency exchanges as money services businesses?
Answer: FinCEN
FinCEN (Financial Crimes Enforcement Network) requires cryptocurrency exchanges to register as money services businesses and comply with AML rules.
What does 'cold storage' mean in the context of cryptocurrency security?
Answer: Keeping private keys on devices not connected to the internet
Cold storage refers to keeping private keys in hardware wallets or air-gapped computers that are never connected to the internet, protecting them from remote hacks.
Under the Travel Rule, what information must U.S. crypto businesses transmit when transferring funds over $3,000?
Answer: Sender and receiver identifying information
The Travel Rule requires Virtual Asset Service Providers to collect and transmit both originator and beneficiary information for transfers above the threshold.
What type of attack involves an adversary secretly relaying communications between two parties who believe they are communicating directly?
Answer: Man-in-the-middle attack
A man-in-the-middle attack intercepts and potentially alters communications between two parties without their knowledge.
What is 'address poisoning' in cryptocurrency security?
Answer: Sending tiny transactions from an address similar to a user's contact to trick them into copying it
Address poisoning sends dust transactions from lookalike addresses so victims copy the fraudulent address from their transaction history instead of the real one.
Which of the following best describes a Sybil attack on a blockchain network?
Answer: An attacker creates many fake identities to gain disproportionate influence in a peer-to-peer network
In a Sybil attack, an adversary creates numerous fake node identities to subvert the reputation system or consensus mechanism of a decentralized network.