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Difficulty: Very hardMust Be True / Most Strongly Supported

Under the newly enacted Global Fintech Regulatory Framework, a digital asset is classified as a 'Systemic Risk' if, and only if, it is both widely adopted and structurally opaque. The framework mandates that any digital asset that is structurally opaque must be subject to enhanced auditing protocols. Furthermore, any digital asset that is not backed by sovereign reserves is structurally opaque. Currently, all digital assets issued by decentralized autonomous organizations (DAOs) lack sovereign reserve backing, but only some of them are widely adopted.

Based on the regulatory framework and current conditions described above, which of the following statements must be true? (Select all that apply)

  1. Every digital asset issued by a decentralized autonomous organization is subject to enhanced auditing protocols.Answer
  2. At least one digital asset issued by a decentralized autonomous organization is classified as a Systemic Risk.Answer
  3. C
    Any digital asset that is classified as a Systemic Risk lacks sovereign reserve backing.
  4. D
    Any digital asset backed by sovereign reserves is exempt from enhanced auditing protocols.
  5. E
    Most digital assets issued by decentralized autonomous organizations are classified as a Systemic Risk.

Answer

The statements that must be true are: 'Every digital asset issued by a decentralized autonomous organization is subject to enhanced auditing protocols' and 'At least one digital asset issued by a decentralized autonomous organization is classified as a Systemic Risk'.
The correct statements are established through direct logical deduction. Because all DAO assets lack sovereign reserve backing, they trigger the condition of being structurally opaque, which in turn necessitates enhanced auditing. This guarantees that every DAO asset is subject to enhanced auditing protocols. Furthermore, since we are told that some DAO assets are widely adopted, and we have proven they are all structurally opaque, there exists at least one asset that is both widely adopted and structurally opaque. Therefore, it is guaranteed that at least one DAO asset is classified as a Systemic Risk.

Step-by-Step Solution

1
Translate the framework rules into formal conditional statements.
Systemic Risk <--> (Widely Adopted AND Structurally Opaque). Structurally Opaque --> Enhanced Auditing. NOT Sovereign Reserve Backing --> Structurally Opaque.
Formalizing the rules prevents necessary/sufficient confusion and clarifies the exact chain of logical relationships.
2
Map the specific conditions provided regarding DAO assets to the conditional chains.
DAO --> NOT Sovereign Reserve Backing. Therefore, DAO --> Structurally Opaque. We are also given: Some DAO are Widely Adopted.
Connecting the specific group (DAOs) to the general rules allows us to deduce what must be true about that group.
3
Derive the final necessary conclusions based on the logical chains.
Since all DAOs are Structurally Opaque, and Structurally Opaque --> Enhanced Auditing, all DAOs must be subject to Enhanced Auditing. Furthermore, since some DAOs are Widely Adopted, and all DAOs are Structurally Opaque, there are some DAOs that are both. Thus, some DAOs are Systemic Risks.
These derived deductions directly match the correct options, proving they are logically guaranteed by the text.

Key Concept

Formal Logic Deductions and Conditional Reasoning
Estimated Time:2m 30s
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Topics

Must Be True / Most Strongly Supported

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