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

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Become a Cryptoasset Anti-Financial Crime Specialist. Explore questions and learn with hints and explanations to excel in your CCAS Certification. Prepare effectively for your exam!

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Which description applies to a centralized lending platform?

Lower yields for lenders
Automatic interest payments to lenders via smart contracts
Noncustodial status and no governing entity
Loss of lender control of assets

The correct answer is: Loss of lender control of assets

A centralized lending platform is characterized by the fact that it manages the lending process through a central entity that has control over the user assets. When lenders participate in such a platform, they typically relinquish direct control of their cryptoassets to the platform. This means that the platform takes custody of the assets, allowing them to manage and allocate the funds to borrowers according to their lending protocols and policies. The centralized nature of this model leads to a loss of direct control for lenders, contrasting with decentralized platforms where users retain custody of their assets through noncustodial practices. This choice effectively highlights the typical dynamic in centralized lending environments, where the platform is responsible for overseeing transactions and maintaining security, but at the expense of giving lenders full autonomy over their assets.