Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

A pseudonymous cryptocurrency has which characteristic?

1. Individuals and entities can be tracked.

2. Identities of users cannot be revealed.

3. Blockchain patterns are hidden.

4. Transactions remain untraceable.

The correct answer is: Identities of users cannot be revealed.

A pseudonymous cryptocurrency is characterized by the fact that while it does not reveal the identities of users directly, it allows transactions to be traced through their public addresses. This means that although the real-world identities are not attached to the cryptocurrency addresses, analysis of transaction data can potentially lead back to individuals, especially if their identity is revealed in some way or if they interact with services that do require identity verification. The characteristic that identities of users cannot be revealed captures the essence of pseudonymity, wherein users maintain a layer of anonymity by using cryptographic addresses instead of their true identities. However, it is important to recognize that this anonymity can be compromised under certain conditions, such as when users consolidate their transactions or if they disclose their addresses publicly. This distinction highlights a critical understanding of how pseudonymous systems function, contrasting them with truly anonymous systems where transactions and identities are completely concealed.