Practice Test Geeks(CBP) Certified Bitcoin Professional Practice Test
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Security and Regulatory Issues Flashcards

7 cards from real CBP 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 Issues flashcards as text

  1. What does the FATF 'Travel Rule' require of virtual asset service providers (VASPs)?

    Answer: VASPs must share originator and beneficiary information with counterpart VASPs for transfers above a threshold

    The FATF Travel Rule requires VASPs to collect and transmit customer identifying information alongside crypto transfers, mirroring traditional wire transfer rules.

  2. Which Bitcoin security practice involves generating keys on a device that has never connected to the internet?

    Answer: Cold storage

    Cold storage means generating and keeping private keys entirely offline, eliminating remote attack vectors that target internet-connected systems.

  3. How does a 51% attack threaten Bitcoin network security?

    Answer: It allows the attacker to rewrite recent transaction history and double-spend coins

    Controlling over half the network hashrate lets an attacker mine a private chain longer than the honest chain, enabling double spends by replacing confirmed transactions.

  4. What is 'dusting' in the context of Bitcoin privacy attacks?

    Answer: Sending tiny amounts of BTC to many addresses to trace wallet ownership

    A dusting attack sends tiny, unusable amounts of Bitcoin to target addresses so that when those 'dust' UTXOs are spent, they reveal address clustering and potentially wallet ownership.

  5. Under U.S. law, how does the IRS currently treat Bitcoin and other cryptocurrencies?

    Answer: As property, making each disposal a taxable event

    IRS Notice 2014-21 and subsequent guidance classify cryptocurrency as property, so selling, trading, or spending it triggers capital gains or loss recognition.

  6. What is the role of a 'watch-only' wallet in a secure Bitcoin custody setup?

    Answer: It monitors balances and transaction history without holding private keys

    A watch-only wallet imports public keys or addresses to track balances and history without exposing private keys, keeping signing capability completely offline.

  7. Which regulatory body in the U.S. has claimed jurisdiction over Bitcoin as a commodity?

    Answer: Commodity Futures Trading Commission (CFTC)

    The CFTC has asserted that Bitcoin is a commodity under the Commodity Exchange Act, giving it enforcement authority over Bitcoin derivatives and fraud in spot markets.