Questions for the 312-82 were updated on : Dec 01 ,2025
FinCEN requires any person engaging in the business of money transmission or the transfer of funds,
including CVC, to (I) maintain an ‘’effective’’ written anti-money laundering program reasonably
designed to prevent the business from being employed to help the financing of terrorist activities
and money laundering and________.
A
Explanation:
FinCEN requires money transmitters and companies involved in virtual currency (CVC) transmission
to report suspicious transactions as part of their anti-money laundering (AML) responsibilities. This is
in addition to maintaining an effective AML program and registering as a money service business
(MSB).
Key Details:
AML Program: The program must be reasonably designed to detect and prevent the use of financial
services for money laundering or terrorist financing.
Reporting Suspicious Activity: FinCEN mandates that companies must file Suspicious Activity Reports
(SARs) for any transactions that appear to be potentially suspicious or indicative of illegal activities.
Regulatory Compliance: This requirement ensures that businesses adhere to federal regulations,
contributing to a secure financial system by monitoring and reporting illicit activity.
Therefore, A. Report suspicious transactions is the correct answer, as this is a key requirement for
companies under FinCEN’s regulations regarding money transmission and virtual currencies.
Ethereum uses_____ as Proof of Work (PoW) whereas Bitcoin uses____based PoW.
D
Explanation:
Ethereum uses Ethash as its Proof of Work (PoW) algorithm, while Bitcoin uses SHA-256 for its PoW
algorithm. Both are used to secure their respective networks, but they differ in terms of
computational complexity and memory requirements.
Key Details:
Ethash (Ethereum): Ethash is a memory-hard hashing algorithm designed to be resistant to ASIC
mining, favoring GPU miners instead. It requires substantial memory, which helps to ensure a higher
degree of decentralization.
SHA-256 (Bitcoin): Bitcoin’s SHA-256 is a highly secure hashing algorithm that supports ASIC mining.
It is computationally intensive but less memory-demanding compared to Ethash.
Purpose in PoW: Both algorithms enable miners to validate transactions and secure the network by
solving complex puzzles. Ethash's design helps Ethereum maintain a decentralized network, whereas
SHA-256 allows Bitcoin to achieve high levels of security with specialized mining equipment.
Therefore, D. ETHASH SHA-256 is the correct answer, as these are the specific PoW algorithms used
by Ethereum and Bitcoin, respectively.
______is designed to allow easy deployment of bloodchains.
B
Explanation:
Hyperledger Cello is designed to facilitate the deployment and management of blockchain networks.
It provides an easy-to-use framework for creating, managing, and scaling blockchain networks,
making it suitable for rapid deployment and operation. Although the term "bloodchains" might be a
typo or intended for "blockchains," Cello indeed simplifies the blockchain setup process for various
applications.
Key Details:
Deployment and Management: Cello offers a suite of tools that automates blockchain deployment,
operation, and monitoring, making it accessible for businesses looking to adopt blockchain
technology with minimal effort.
Modular Approach: It supports various blockchain frameworks, including Hyperledger Fabric, and is
aimed at reducing the complexity involved in blockchain management.
Use Cases: Hyperledger Cello is useful for enterprise blockchain applications, as it allows
administrators to manage blockchain networks with tools that support configuration, monitoring,
and scaling.
Thus, B. Cello is the correct answer, as it simplifies blockchain deployment and management.
_________is a blockchain based predictions market that uses the Ethereum blockchain.
A
Explanation:
Augur is a decentralized, blockchain-based predictions market built on the Ethereum network. It
enables users to create and participate in markets based on the outcome of real-world events, using
smart contracts to automate the process and secure transactions.
Key Details:
Ethereum-Based: Augur utilizes the Ethereum blockchain to facilitate the creation and settlement of
prediction markets. It leverages Ethereum's smart contracts to ensure transparency, immutability,
and trustless interactions.
Decentralized Prediction Market: In Augur, users can bet on the outcome of various events, ranging
from sports to elections. The decentralized nature of the platform ensures that no central authority
controls the markets, providing a level of censorship resistance.
Token Usage: Augur uses a token called REP (Reputation) that holders use to report and dispute
outcomes of events on the platform. This ensures that the market outcomes are validated in a
decentralized manner.
Thus, A. Augur is the correct answer, as it is a blockchain-based prediction market built on Ethereum.
In this method users permanently destroy a certain quantity of bitcoin in proportion to the quantity
of altcoin to be demand. What is this method?
B
Explanation:
Proof of Burn (PoB) is a consensus mechanism where users permanently destroy (or "burn") a certain
quantity of cryptocurrency, such as Bitcoin, to gain the right to mine or acquire an altcoin. This
process proves commitment to the network and secures it by effectively sacrificing one asset to
obtain another.
Key Details:
Burning Process: In PoB, participants send a certain amount of cryptocurrency to an unspendable
address, effectively removing it from circulation. This act serves as proof that they have invested in
the network by reducing the supply of the original cryptocurrency.
Purpose and Use Cases: PoB is used by networks that want to incentivize long-term commitment and
reduce total supply. It is often seen in new blockchain projects that allow miners or users to trade
value in established currencies like Bitcoin for the native token of the new network.
Security: By requiring participants to destroy value, PoB helps prevent spam attacks and promotes
network stability.
Therefore, B. Proof of Burn is the correct answer, as it describes the method where users destroy a
certain amount of cryptocurrency to receive or mine another asset.
A____does not result in a new chain and does not require client nodes to upgrade.
B
Explanation:
A soft fork is a change to a blockchain protocol that is backward-compatible, meaning it does not
result in the creation of a new chain and does not require all client nodes to upgrade. Nodes that do
not upgrade can still participate in the network, although they may not have access to all new
features introduced by the soft fork.
Key Details:
Backward Compatibility: In a soft fork, updated nodes enforce the new rules, while non-updated
nodes continue to follow the older protocol but remain part of the same blockchain. This contrasts
with hard forks, where incompatibility leads to the creation of a new chain.
Use Cases: Soft forks are commonly used to implement protocol upgrades or adjustments that do not
fundamentally alter the structure of the blockchain, such as increasing block size limits or adding new
features that are optional.
Examples: An example of a soft fork is the Segregated Witness (SegWit) update on the Bitcoin
blockchain, which was implemented to increase block capacity without splitting the chain.
Thus, B. Soft fork is the correct answer, as it refers to a backward-compatible update that does not
require a new chain or mandatory upgrades from all nodes.
A________ is a blockchain where participants of the network are already known and trusted.
A
Explanation:
A Permissioned ledger is a blockchain where participants are known and trusted, and access to the
network is restricted to authorized entities. Permissioned ledgers are commonly used in enterprise
and consortium settings where privacy, compliance, and control over data are essential.
Key Details:
Controlled Access: In a permissioned ledger, only pre-approved participants can validate transactions
and participate in the consensus process. This model ensures that all network members are
identified and trusted, which is ideal for environments requiring a higher level of control and privacy.
Use Cases: Permissioned ledgers are widely used in industries such as finance, healthcare, and
supply chain, where it’s important to know and trust participants due to regulatory or operational
needs.
Contrast with Permissionless Ledgers: Unlike permissionless ledgers (such as Bitcoin), which allow
anyone to join and participate in the network, permissioned ledgers restrict participation to entities
that meet specific criteria.
Thus, A. Permissioned ledger is the correct answer, as it describes a blockchain network where
participants are known and trusted.
What is the primary benefit to patients of blockchain in the healthcare are industry?
B
Explanation:
The primary benefit of blockchain in the healthcare industry for patients is total control over personal
health records. Blockchain enables secure, decentralized storage of health data, allowing patients to
control access to their information and share it with healthcare providers as needed.
Key Details:
Data Ownership and Privacy: Blockchain gives patients the ability to own and manage their health
records. They can grant or revoke access to different healthcare providers, ensuring that only
authorized personnel have access to their data.
Improved Security: Health records stored on a blockchain are encrypted and decentralized, making
them resistant to tampering and unauthorized access. This enhances patient privacy and reduces the
risk of data breaches.
Interoperability and Accessibility: Blockchain facilitates seamless sharing of health records across
different healthcare providers and systems, improving coordination and care continuity without
compromising data integrity.
Therefore, B. Total control over personal health records is the correct answer, as it represents a
significant advantage for patients in managing their healthcare information securely.
__________ is the process of converting rights to an asset into a digital representation on a
blockchain.
D
Explanation:
Tokenization is the process of converting rights to an asset into a digital representation on a
blockchain. This process allows assets like real estate, art, or securities to be represented as digital
tokens that can be traded or transferred on a blockchain.
Key Details:
Digital Representation of Assets: Tokenization involves creating digital tokens on a blockchain that
represent ownership or rights to a real-world asset. These tokens can be transferred and traded
much like traditional assets.
Advantages of Tokenization: By enabling fractional ownership, tokenization lowers barriers to
investment and improves liquidity. It also provides transparency and traceability in asset
transactions.
Use Cases: Tokenization is widely used in real estate, art, and securities, as it facilitates easy transfer,
enhances liquidity, and enables global access to traditionally illiquid assets.
Thus, D. Tokenization is the correct answer, as it describes the process of converting asset rights into
a digital form on a blockchain.
According to Consensys, which of the following are benefits of blockchain for finance (pick two)?
C, D
Explanation:
According to ConsenSys, blockchain offers various benefits for finance, including streamlined
processes and access to international markets. These benefits enable financial institutions to operate
more efficiently and expand their services globally.
Key Details:
Streamlined Processes: Blockchain eliminates intermediaries, automates workflows through smart
contracts, and reduces paperwork, resulting in faster and more efficient financial transactions and
record-keeping.
Access to International Markets: Blockchain facilitates cross-border transactions and reduces the
barriers associated with currency exchange and international settlements, allowing financial
institutions to expand their reach and provide services to a global audience.
Operational Efficiency: By automating and digitizing various financial processes, blockchain reduces
costs, enhances accuracy, and simplifies compliance, making it easier for financial institutions to
operate internationally.
Therefore, C. Streamlined processes and D. Access to international markets are the correct answers,
as these align with the benefits of blockchain for finance according to ConsenSys.
What is the primary way blockchain could help in the food industry?
C
Explanation:
Blockchain can greatly benefit the food industry by making transactions more transparent. By
recording each transaction in an immutable ledger, blockchain enables traceability, which is crucial
for food safety, quality control, and ensuring that products meet regulatory standards.
Key Details:
Traceability: Blockchain allows for the tracking of food products from farm to table. Each step in the
supply chain can be recorded on the blockchain, providing consumers and regulators with
transparent information about the origin and journey of food products.
Improving Trust and Safety: With transparent transactions, stakeholders can quickly identify and
address issues such as contamination, fraud, or mislabeling, which enhances food safety and
consumer trust.
Enhanced Efficiency: By reducing paperwork and enabling digital record-keeping, blockchain
streamlines the process of verifying and sharing information about food products across various
parties.
Thus, C. Making transactions more transparent is the correct answer, as it highlights blockchain's role
in providing transparency in the food industry.
What is the term for the smallest subunit in Ether.
D
Explanation:
The smallest subunit of Ether is called a Wei. Ether (ETH) is divided into several subunits for precision
in transactions, with Wei being the smallest, equivalent to 10−1810^{-18}10−18 Ether.
Key Details:
Subunits of Ether: The Ethereum network uses smaller units to facilitate transactions that require a
higher degree of accuracy. The most commonly used subunits are Gwei (billion Wei), but Wei
represents the smallest possible division.
Importance in Transactions: Wei ensures that Ether can be broken down into very small units,
allowing for microtransactions and precise gas calculations, which are essential in smart contract
executions.
Naming Convention: This denomination was named in honor of Wei Dai, a cryptographer who
proposed b-money, an early concept of digital currency.
Therefore, D. Wei is the correct answer, as it is the smallest unit of Ether.
Which of the following are benefits of blockchain for financial services according to IBM ‘’Blockchain
for Financial Services’’?
AB
Explanation:
According to IBM’s “Blockchain for Financial Services”, blockchain offers several benefits, including
faster settlement and automated compliance. These features are critical in enhancing the efficiency
and reliability of financial services.
Key Details:
Faster Settlement: Blockchain technology enables near-instantaneous settlement of transactions by
eliminating the need for traditional intermediaries and reducing processing times, which can speed
up transactions significantly compared to legacy systems.
Automated Compliance: Blockchain’s transparency and immutability allow for the automatic
recording and verification of regulatory requirements. Smart contracts can be used to enforce
compliance rules in real-time, ensuring that transactions adhere to regulatory standards without
manual intervention.
Impact on Financial Services: These benefits translate to reduced operational costs, improved
transaction accuracy, and increased trust between parties, making blockchain an attractive solution
for financial institutions.
Thus, A. Faster settlement and B. Automated compliance are the correct answers, as these are
specific benefits of blockchain in financial services according to IBM.
________are computer programs which facilitate transaction automation and eliminates the need
for intermediaries
D
Explanation:
Smart Contracts are self-executing programs that automate transactions and eliminate the need for
intermediaries. They operate on blockchain networks and are coded to execute specific actions when
predetermined conditions are met.
Key Details:
Transaction Automation: Smart contracts automatically execute the terms of a contract once the
agreed-upon conditions are fulfilled. This reduces manual processing and ensures transparency and
trust between parties.
Elimination of Intermediaries: By running on a decentralized network, smart contracts eliminate the
need for third-party intermediaries, such as lawyers or notaries, reducing transaction costs and
increasing efficiency.
Application Across Industries: Smart contracts are used in various sectors, from finance and supply
chain to insurance and real estate, due to their ability to enforce terms without human intervention.
Therefore, D. Smart contracts is the correct answer, as they facilitate automated transactions and
remove the need for intermediaries.
These wallets use a this passphrase to derive the private key
B
Explanation:
Brain Wallets derive private keys from a passphrase. This approach allows users to create a wallet by
memorizing a unique phrase, which is then hashed to generate the corresponding private key.
Key Details:
Use of Passphrases: Brain wallets use a passphrase that is entered by the user, typically a string of
words that can be remembered easily. This passphrase is then converted into a private key using a
cryptographic hash function.
Security Concerns: While convenient, brain wallets are susceptible to brute-force attacks if the
passphrase is not sufficiently complex. Simple or common phrases may be vulnerable to attackers
who use lists of common phrases to derive potential private keys.
Distinction from Deterministic Wallets: Unlike Hierarchical Deterministic Wallets, which use a seed
phrase to generate a tree of keys, brain wallets derive a single private key directly from a passphrase.
In conclusion, B. Brain Wallets is the correct answer, as these wallets use a passphrase to generate
the private key.