Kennedy and Parker form a limited liability company, Cannabis Culture, LLC, in order to sell marijuana and marijuana related items in their state which has legalized the sale of recreational marijuana. They open a brick-and-mortar store as well as an online store under the name CannaWeb, LLC, which only sells cannabis related products, but no actual cannabis or products containing THC. The online store allows for payment via credit or debit card; however, the brick-and-mortar store only accepts cash payments or the transfer of various types of cryptocurrency such as Bitcoin. Outside of the store, they install both a cash ATM and a Bitcoin ATM which allows customers to purchase Bitcoins by using cash or debit cards. A QR Code is printed on a receipt and that receipt can then be used inside the store to purchase products.

Cannabis Culture does not accept checks, credit cards, or debit cards in the store, because they cannot find a bank willing to establish a relationship with them because the sale of cannabis products is a federal crime. However, because the cryptocurrency market is unregulated, they elect to use it as a type of "online" banking. CannaWeb, however, is able to open a bank account because it is not selling cannabis product, but rather, accessories to the consumption of cannabis, such as pipes, bongs, etc.

Cannabis Culture has five full-time employees who are paid in cash weekly and CannaWeb has two full-time employees who are paid by direct deposit weekly. CannaWeb also makes purchases from suppliers using either checks, electronic fund transfers from their bank, or a company credit card. Cannabis Culture, however, makes all payments to their suppliers in cash.

One day, an employee from CannaWeb, with access to where the company checks are kept, takes one of the checks and makes it out to himself. The employee writes the check for $400 and forges Parker's signature because only Kennedy and Parker are authorized to sign checks for the business. The employee deposits the check into his personal account using his bank check deposit app on his phone. Because his personal account is at the same bank CannaWeb uses, the bank makes the funds immediately available for withdrawal and later that day, the employee withdraws the $400. A week later, Parker writes a check to a supplier for $800, believing the account has a balance of $1,000. The balance is actually $600. Nonetheless, Parker post-dates the check for one week because he is hesitant about the purchase. Two days later, Parker puts a stop payment order on the check because he wants to cancel the order.When the supplier receives the check, however, they immediately deposited it into their account, causing the CannaWeb account to overdraft, prior to Parker's stop payment order being initiated.Kennedy and Parker form a limited liability company, Cannabis Culture, LLC, in order to sell marijuana and marijuana related items in their state which has legalized the sale of recreational marijuana. They open a brick-and-mortar store as well as an online store under the name CannaWeb, LLC, which only sells cannabis related products, but no actual cannabis or products containing THC. The online store allows for payment via credit or debit card; however, the brick-and-mortar store only accepts cash payments or the transfer of various types of cryptocurrency such as Bitcoin. Outside of the store, they install both a cash ATM and a Bitcoin ATM which allows customers to purchase Bitcoins by using cash or debit cards. A QR Code is printed on a receipt and that receipt can then be used inside the store to purchase products.

Cannabis Culture does not accept checks, credit cards, or debit cards in the store, because they cannot find a bank willing to establish a relationship with them because the sale of cannabis products is a federal crime. However, because the cryptocurrency market is unregulated, they elect to use it as a type of "online" banking. CannaWeb, however, is able to open a bank account because it is not selling cannabis product, but rather, accessories to the consumption of cannabis, such as pipes, bongs, etc.

Cannabis Culture has five full-time employees who are paid in cash weekly and CannaWeb has two full-time employees who are paid by direct deposit weekly. CannaWeb also makes purchases from suppliers using either checks, electronic fund transfers from their bank, or a company credit card. Cannabis Culture, however, makes all payments to their suppliers in cash.

One day, an employee from CannaWeb, with access to where the company checks are kept, takes one of the checks and makes it out to himself. The employee writes the check for $400 and forges Parker's signature because only Kennedy and Parker are authorized to sign checks for the business. The employee deposits the check into his personal account using his bank check deposit app on his phone. Because his personal account is at the same bank CannaWeb uses, the bank makes the funds immediately available for withdrawal and later that day, the employee withdraws the $400. A week later, Parker writes a check to a supplier for $800, believing the account has a balance of $1,000. The balance is actually $600. Nonetheless, Parker post-dates the check for one week because he is hesitant about the purchase. Two days later, Parker puts a stop payment order on the check because he wants to cancel the order.When the supplier receives the check, however, they immediately deposited it into their account, causing the CannaWeb account to overdraft, prior to Parker's stop payment order being initiated.

1. Who will be financially responsible for the forged check written by the employee?

CannaWeb's bank.

CannaWeb.

CannaWeb and the bank share liability equally.

Parker, personally.

2. Who will be financially responsible for the post-dated check that Parker wrote to the supplier which caused the account to overdraft?

Parker, personally.

CannaWeb.

CannaWeb's Bank.

CannaWeb's employee who committed the theft.

3. When CannaWeb pays their employees via direct deposit, how quickly should the employee be able to access the funds in their account?

At least $300 must be made available immediately upon deposit and the remainder within 3 business days.

Within three business days.

Within one business day or immediately if the bank has received the funds.

At least $100 must be made available immediately upon deposit and the remainder within 3 business days.

4. A CannaWeb customer makes a purchase online, using a debit card, for a total of $37. Due to a computer glitch, CannaWeb accidentally charges the customer $370. The amount cleared the bank without the customer or CannaWeb realizing the error. How quickly must the customer notify the bank in order to demand the $333 back?

60 days.

24 hours.

6 months.

10 days.

5. If someone hacks the cryptocurrency digital wallet of Cannabis Culture, can Cannabis Culture obtain help in recovering the stolen virtual currency from the Federal Deposit Insurance Corporation (FDIC)?

No, but the National Credit Union Share Insurance Fund will cover the loss.

Yes, unless the business owner also maintains cyber-insurance, which must cover the loss prior to any coverage by the FDIC.

Yes, if a business owning the digital wallet has obtained an insurance policy covering it.

No, cryptocurrencies cannot be federally insured.

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