C4 Regulations, Compliance & Security

Question 1

What is the purpose of KYC regulations in cryptocurrency exchanges?

Accepted Answer

To verify user identity

Answer

KYC (Know Your Customer) rules help prevent money laundering and identity fraud by requiring users to verify their identity.

Question 2

Which global organization develops standards to combat money laundering in crypto?

Accepted Answer

FATF

Answer

The Financial Action Task Force (FATF) issues guidelines to help countries combat money laundering and terrorist financing involving cryptocurrencies.

Question 3

What is one common method to secure a cryptocurrency wallet?

Accepted Answer

Two-factor authentication

Answer

Using two-factor authentication adds an extra layer of protection beyond passwords, enhancing wallet security.

Question 4

Why is regulatory compliance important for crypto businesses?

Accepted Answer

To operate legally and gain trust

Answer

Compliance helps ensure operations are legal and transparent, reducing the risk of penalties and building user trust.

Question 5

What does AML stand for in cryptocurrency compliance?

Accepted Answer

Anti-Money Laundering

Answer

AML (Anti-Money Laundering) refers to laws and procedures designed to stop criminals from disguising illegally obtained funds as legitimate income.

(C4) CryptoCurrency Certification Consortium Practice Test

(C4) CryptoCurrency Certification Consortium Practice Test

C4 Regulations, Compliance & Security