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.
• The impact of fraud losses, chargebacks, and bank claims.

Exercise 1, Mapping the Exposure: Teams track one buy and one sell order from initiation 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.
• Role of 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 reuse of payment proofs.
• Partial payments, altered amounts, and visually similar figures.

Case Study, Five Recurring Patterns: Participants categorize anonymized real-world dispute records against five specific typologies and identify the control failures in each instance.

False Confirmations, Forged Receipts, and Account Takeovers

• Orders marked as paid without an actual transfer occurring.
• Edited screenshots and fabricated bank receipts.
• Cross-phishing attacks in order chats and credential theft.
• Use of hijacked accounts to defraud other users.

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

KYC for Individuals: Level 1 and Level 2

• Level 1 data collection and identity document verification.
• Level 2 revalidation, video selfie liveness checks, and list screening.
• Aligning verified identity with the payment instrument used.

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

KYC for Legal Entities and Beneficial Ownership

• Corporate documentation, representation powers, and authorized signatories.
• Mapping beneficial ownership chains and control indicators.
• Risk factors for legal persons and the need for periodic reviews.

Identity Fraud and Document Forensics

• Detection of forged, borrowed, and synthetic identities.
• Defending against liveness bypasses, deepfakes, and injection attacks.
• Revalidation triggers following disputes or compromise claims.

Lab, Document Forensics: Participants examine tampered documents and screenshots for inconsistencies in font, layout, metadata, and account details.

AML Screening, Sanctions, and PEPs

• List matching, tolerance thresholds, and managing false positives.
• Identifying PEPs, reviewing adverse media, and assessing source of wealth.
• Enhanced due diligence and defining escalation thresholds.

Customer Risk Assessment and the Risk-Based Approach

• Evaluating customer, product, channel, geographic, and behavioral factors.
• Risk rating, review triggers, and treatment decisions.
• Calibrating due diligence efforts to the actual risk profile.

Transaction Monitoring and Blockchain Analytics

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

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

Evidence Standards for Payment Proof

• Acceptable evidence types: statements and continuous recordings.
• Authenticity checks on documents, captures, and metadata.
• Accurately recording what has been verified and what has not.

Lab, Evidence or Artifact: Teams classify a set of submissions into acceptable evidence, insufficient evidence, or likely fabrication, specifying what additional information is required.

Disputed Evidence and Interbank Delays

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

Workshop, Both Sides Are Right: Teams resolve a dispute where both buyer and seller hold apparently genuine proof, defending the final outcome.

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and applying suspensions.
• Deadlines for partial payments and returns to originating accounts.
• Handling refunds to incorrect banks: fees and resolution timelines.
• Managing restricted balances and retaining new deposits.

Exercise, Drafting the Sanction: Participants create the action plan, notice, and timeline for three escalating cases, testing them against the playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention.
• Utilizing the escalation matrix and department head reviews.
• Reporting suspicious activity and maintaining records.

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation processes, sanctions decisions, and counterparty resolution.
• Creating a justification memo for peer review.

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

Diagnostic and Advisory Session (Additional Component)

• Review of current practices and identification of protocol gaps.
• Guidance on evidence standards and resolving disputed cases.
• Guidance on actions and sanctions criteria.