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 lifecycles and asset release mechanisms.
• Exposure points: off-platform fiat vs. on-platform crypto.
• Consequences of fraud losses, chargebacks, and bank claims.

Exercise 1, Map the Exposure: Teams track a buy order and a sell order from initiation to release, identifying every instance 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.
• 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 payments, altered figures, and visually similar amounts.

Case study, Five Recurring Patterns: Participants categorize anonymized dispute records against five key typologies and identify the specific control failure in each instance.

False Confirmations, Forged Receipts and Account Takeover

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

Workshop, Phishing in the Order Chat: Teams differentiate between genuine and fraudulent support messages, then develop the takedown and revalidation pathway 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 identities with payment instruments.

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

KYC for Legal Entities and Beneficial Ownership

• Corporate documentation, representation authority, 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 PEP

• List matching, tolerance thresholds, 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 profile, product type, 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 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 analyze a withdrawal request with mixed funding history, decide whether to approve or escalate, and justify the decision using monitoring criteria.

Evidence Standards for Payment Proof

• Acceptable evidence types: statements and uninterrupted recordings.
• Authenticity checks for documents, captures, and metadata.
• Accurate recording of verified and unverified items.

Lab, Evidence or Artifact: Teams classify a set of submissions as acceptable, insufficient, or probable fabrications, and specify alternative requests.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties provide valid evidence.
• Interbank processing waiting periods 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 seemingly genuine proof, and defend their outcome.

Action and Sanctions Playbook

• Collateral freezing, account restrictions, and suspension protocols.
• Partial payment deadlines and returns to originating accounts.
• Handling refunds to incorrect banks: fees and resolution timelines.
• Restricted balances and retention of new deposits.

Exercise, Write the Sanction: Participants draft actions, notices, and timeframes 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.

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation, sanctions decisions, and counterparty resolution.
• Justification memos and 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 protocol gaps.
• Guidance on evidence standards and disputed cases.
• Guidance on action and sanctions criteria.