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 mechanisms.
• Risk exposure points: off-platform fiat and on-platform crypto.
• Consequences of fraud loss, including chargebacks and bank claims.

Exercise 1: Mapping the Exposure. Teams trace one buy order and one sell order from placement to release, identifying every point where off-platform payment disrupts 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 requirements.
• Jurisdictional risks, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

• Payment channel deviations and mismatched payer accounts.
• Triangulation schemes, third-party payers, and reused payment proofs.
• Partial, altered, or visually similar transaction amounts.

Case Study: Five Recurring Patterns. Participants classify real anonymized dispute records against these five typologies and identify the control failure in each instance.

False Confirmations, Forged Receipts, and Account Takeover

• Orders marked as paid without an actual transfer.
• Edited screenshots and falsified bank receipts.
• Cross-phishing in order chats and credential theft.
• Hijacked accounts utilized to defraud other users.

Workshop: Phishing in the Order Chat. Teams compare genuine support messages with fraudulent ones, then draft the takedown and revalidation path for the reported account.

KYC for Individuals: Level 1 and Level 2

• Level 1 data capture and identity document review.
• Level 2 revalidation, video-selfie liveness checks, and list screening.
• Aligning verified identity with the payment instrument.

Lab: Onboarding Under Pressure. Participants conduct Level 1 and Level 2 reviews on sample files, documenting the 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 persons and periodic review requirements.

Identity Fraud and Document Forensics

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

Lab: Document Forensics. Participants examine tampered documents and screen captures for inconsistencies in font, layout, metadata, and account numbers.

AML Screening, Sanctions, and PEPs

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

Customer Risk Assessment and the Risk-Based Approach

• Customer, product, channel, geography, and behavioral risk factors.
• Risk rating, review triggers, and treatment decisions.
• Calibrating due diligence efforts to the actual risk level.

Transaction Monitoring and Blockchain Analytics

• Withdrawal approvals based on account age, KYC status, and history.
• Wallet attribution, high-risk counterparties, and fund tracing.
• Chargeback-prone gateways and payment method risks.

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

Evidence Standards for Payment Proof

• Acceptable evidence types, such as statements and uninterrupted recordings.
• Authenticity checks on documents, captures, and metadata.
• Recording what was verified and what was excluded.

Lab: Evidence or Artifact. Teams categorize a set of submissions into acceptable evidence, insufficient evidence, and probable fabrication, stating what additional information to request.

Disputed Evidence and Interbank Delays

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

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

Action and Sanctions Playbook

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

Exercise: Writing the Sanction. Participants draft the action, notice, and timeframe for three escalating cases, testing them against playbook criteria.

Case Management, Documentation, and Escalation

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

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation, sanctions decision, and counterparty resolution.
• Creating a justification memo and conducting peer review.

Capstone: Full Case Run. Each team manages a complete simulated case from the first 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 cases.
• Guidance on actions and sanctions criteria.