Fraud Prevention, KYC and AML Compliance for P2P and Cryptoasset Exchange Operations Training Course

P2P Exchange Operations and the Fraud Risk Landscape

• The escrow-based order lifecycle and asset release mechanics.
• Identifying exposure points: off-platform fiat versus on-platform crypto.
• Consequences of fraud loss, chargebacks, and bank claims.

Exercise 1, Mapping the Exposure: Teams will trace a buy order and a sell order from placement to release, identifying all points where off-platform payments disrupt the link between identity and funds.

Regulatory Framework and Supervisory Expectations

• FATF Recommendations, VASP obligations, and the travel rule.
• Cryptoasset supervisory authorities and exchange licensing.
• Jurisdictional risks, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

• Payment channel deviations and mismatches in payer accounts.
• Triangulation schemes, third-party payers, and reused payment proofs.
• Partial payments, altered amounts, and visually similar figures.

Case Study, Five Recurring Patterns: Participants will classify real anonymized dispute records against five specific typologies and identify the failed control in each case.

False Confirmations, Forged Receipts, and Account Takeover

• Orders marked as paid without actual transfers.
• Edited screenshots and falsified bank receipts.
• Cross-phishing in order chats and credential theft.
• Hijacked accounts exploited to scam other users.

Workshop, Phishing in Order Chat: Teams will distinguish between genuine and fraudulent support messages, then draft a takedown and revalidation plan for the affected account.

KYC for Individuals: Level 1 and Level 2

• Level 1 data capture and identity document verification.
• Level 2 revalidation, video-selfie liveness checks, and list screening.
• Aligning verified identities with payment instruments.

Lab, Onboarding Under Pressure: Participants will conduct Level 1 and Level 2 reviews on sample files, documenting discrepancies that necessitate revalidation.

KYC for Legal Entities and Beneficial Ownership

• Corporate documentation, representation powers, and signatories.
• Beneficial ownership chains and control indicators.
• Risk factors for legal entities and periodic review requirements.

Identity Fraud and Document Forensics

• Forged, borrowed, and synthetic identities.
• Liveness bypass techniques, deepfake attempts, and injection attacks.
• Revalidation triggers following disputes or compromise claims.

Lab, Document Forensics: Participants will examine tampered documents and screen captures for inconsistencies in fonts, layouts, metadata, and account numbers.

AML Screening, Sanctions, and PEP

• List matching, tolerance levels, and managing false positives.
• Identifying PEPs, adverse media analysis, and source of wealth verification.
• Enhanced due diligence and escalation thresholds.

Customer Risk Assessment and the Risk-Based Approach

• Factors including customer profile, product, channel, geography, and behavior.
• Risk rating, review triggers, and treatment decisions.
• Scaling due diligence efforts to match actual risk levels.

Transaction Monitoring and Blockchain Analytics

• Withdrawal approval criteria: account age, KYC status, and history.
• Wallet attribution, high-risk counterparties, and fund tracing.
• Risks associated with chargeback-prone gateways and payment methods.

Case Study, The Large Withdrawal: Participants will assess a withdrawal request with mixed funding history, decide on approval or escalation, and justify the decision based on monitoring criteria.

Evidence Standards for Payment Proof

• Acceptable evidence types: statements and uninterrupted recordings.
• Authenticity verification for documents, captures, and metadata.
• Documenting what was verified and what was not.

Lab, Evidence or Artifact: Teams will categorize submissions as acceptable evidence, insufficient evidence, or probable fabrication, specifying what additional requests are needed.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties submit valid evidence.
• Managing waiting periods for interbank processing and preventive holds.
• Documented decision criteria for expired orders.

Workshop, Both Sides Are Right: Teams will resolve a dispute where both buyer and seller present seemingly genuine proof, defending the chosen outcome.

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and suspensions.
• Deadlines for partial payments and returns to originating accounts.
• Handling refunds to incorrect banks: fees and resolution timeframes.
• Restricted balances and retention of new deposits.

Exercise, Write the Sanction: Participants will draft actions, notices, and timeframes for three escalating cases, testing them against playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention.
• Escalation matrices and department head reviews.
• Suspicious activity reporting and record-keeping compliance.

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation, sanctions decisions, and counterparty resolution.
• Justification memos and peer review processes.

Capstone, Full Case Run: Each team will manage a complete simulated case from the initial suspicious message to the final decision, presenting a written justification for peer review.

Diagnostic and Advisory Session (Additional Component)

• Review of current practices and protocol gaps.
• Guidance on evidence standards and disputed case resolution.
• Guidance on action and sanctions criteria.