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

P2P Exchange Operations and the Fraud Risk Landscape

• Escrow-based order lifecycle and asset release mechanisms.
• Risk exposure points: off-platform fiat versus on-platform crypto.
• Consequences of fraud loss, chargebacks, and bank claims.

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

Regulatory Framework and Supervisory Expectations

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

Fraud Typologies in P2P Trading

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

Case Study, Five Recurring Patterns: Participants classify real anonymised dispute records against five key typologies and identify the specific control that failed in each instance.

False Confirmations, Forged Receipts, and Account Takeover

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

Workshop, Phishing in the Order Chat: Teams distinguish genuine support messages from fraudulent ones and draft the takedown and revalidation protocol for the reported 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 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 signatory verification.
• Beneficial ownership chains and control indicators.
• Risk factors for legal persons and periodic review processes.

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 PEP

• List matching, tolerance levels, and managing false positives.
• PEP identification, 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, product, channel, geography, and behavior.
• Risk rating, review triggers, and treatment decisions.
• Scaling due diligence efforts to the actual risk level.

Transaction Monitoring and Blockchain Analytics

• Withdrawal approval criteria: 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 assess 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

• Acceptable evidence types: statements and uninterrupted recordings.
• Authenticity checks on documents, captures, and metadata.
• Documenting verified items and outstanding questions.

Lab, Evidence or Artifact: Teams categorize a set of submissions into acceptable evidence, insufficient evidence, and probable fabrication, specifying what further requests are needed.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties provide valid evidence.
• Handling interbank processing times and preventive holds.
• Documented decision criteria for time-expired orders.

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

Action and Sanctions Playbook

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

Exercise, Drafting Sanctions: Participants write the action, notice, and timeframe 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 protocols.

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation, sanctions decisions, and counterparty resolution.
• Preparing justification memos and conducting peer reviews.

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 review.

Diagnostic and Advisory Session (Additional Component)

• Review of current practices and identification of protocol gaps.
• Guidance on evidence standards and handling disputed cases.
• Guidance on action and sanction criteria.