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

P2P Exchange Operations and the Fraud Risk Environment

• The escrow-based order lifecycle and the release of assets.
• Identifying risk exposure: off-platform fiat versus on-platform crypto.
• Consequences of fraud, including losses, chargebacks, and bank claims.

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

Regulatory Framework and Supervisory Expectations

• FATF Recommendations, VASP obligations, and the travel rule.
• Crypto asset supervisory authorities and licensing for exchange houses.
• Assessing jurisdictional risks, monitoring grey lists, and understanding sanctions exposure.

Fraud Typologies in P2P Trading

• Deviations in payment channels and mismatches in payer accounts.
• Triangulation schemes, third-party payers, and the reuse of payment proof.
• 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 control failure in each instance.

False Confirmations, Forged Receipts, and Account Takeovers

• Marking orders as paid without an actual transfer occurring.
• Use of edited screenshots and falsified bank receipts.
• Cross-phishing in order chats and theft of credentials.
• Compromised accounts being reused to defraud other users.

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

KYC for Individuals: Level 1 and Level 2

• Data capture and identity document review for Level 1.
• Level 2 revalidation, including video selfie liveness checks and list screening.
• Matching verified identity to the payment instrument.

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

KYC for Legal Entities and Beneficial Ownership

• Reviewing corporate documents, powers of representation, and signatories.
• Mapping beneficial ownership chains and control indicators.
• Assessing legal person risk factors and conducting periodic reviews.

Identity Fraud and Document Forensics

• Detecting forged, borrowed, and synthetic identities.
• Identifying liveness bypasses, deepfake attempts, and injection attacks.
• Triggering revalidation following disputes or compromise claims.

Lab, Document Forensics: Participants will examine tampered documents and screenshots for inconsistencies in fonts, layout, metadata, and account numbers.

AML Screening, Sanctions, and PEPs

• List matching, tolerance levels, and managing false positives.
• Identifying PEPs, analyzing adverse media, and verifying source of wealth.
• Applying enhanced due diligence and defining escalation thresholds.

Customer Risk Assessment and Risk-Based Approaches

• Evaluating customer, product, channel, geography, and behavioral factors.
• Setting risk ratings, defining review triggers, and making treatment decisions.
• Aligning the depth of due diligence with the actual level of risk.

Transaction Monitoring and Blockchain Analytics

• Withdrawal approval based on account age, KYC status, and transaction history.
• Wallet attribution, high-risk counterparties, and tracing funds.
• Identifying chargeback-prone gateways and assessing payment method risk.

Case Study, The Large Withdrawal: Participants will review a withdrawal request with a mixed funding history, decide whether to approve or escalate, and justify the decision based on monitoring criteria.

Evidence Standards for Payment Proof

• Defining acceptable evidence, such as statements and uninterrupted recordings.
• Performing authenticity checks on documents, captures, and metadata.
• Documenting what has been verified and what remains unresolved.

Lab, Evidence or Artifact: Teams will categorize a set of submissions into acceptable evidence, insufficient evidence, and probable fabrication, specifying alternative requests where needed.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties present valid evidence.
• Managing waiting periods for interbank processing and implementing preventive holds.
• Applying documented decision criteria for time-expired orders.

Workshop, Both Sides Are Right: Teams will resolve a dispute in which both buyer and seller hold seemingly genuine proof, defending their final outcome.

Action and Sanctions Playbook

• Freezing collateral, restricting account access, and suspending services.
• Setting deadlines for partial payments and returning funds to the originating account.
• Handling refunds to incorrect banks, including fees and resolution timelines.
• Managing restricted balances and retaining new deposits.

Exercise, Drafting the Sanction: Participants will create the action, notice, and timeframe for three escalating cases and validate them against the playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention records.
• Using the escalation matrix and reviewing cases with department heads.
• Reporting suspicious activity and adhering to record-keeping standards.

Capstone: End-to-End Fraud Case

• Reviewing orders, assessing evidence, and revalidating identity.
• Handling escalations, making sanctions decisions, and resolving counterparty issues.
• Preparing justification memos and undergoing peer review.

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)

• Reviewing current practices and identifying protocol gaps.
• Providing guidance on evidence standards and resolving disputed cases.
• Offering guidance on action and sanctions criteria.