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

P2P Exchange Operations and the Fraud Risk Landscape

• Understanding the escrow-based order lifecycle and asset release mechanisms.
• Identifying exposure points: off-platform fiat transactions versus on-platform crypto movements.
• Assessing the consequences of fraud loss, chargebacks, and bank claims.

Exercise 1, Mapping the Exposure: Teams trace a single buy and sell order from initiation 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.
• Crypto asset supervisory authorities and exchange licensing requirements.
• Jurisdictional risks, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

• Payment channel deviations and discrepancies in payer accounts.
• Triangulation schemes, third-party payers, and reuse of payment proof.
• Partial payments, altered amounts, and visually similar figures.

Case Study, Five Recurring Patterns: Participants analyze real, anonymized dispute records to classify them against five common typologies and identify the specific control failure in each instance.

False Confirmations, Forged Receipts, and Account Takeovers

• Marking orders as paid without an actual transfer occurring.
• Editing screenshots and falsifying bank receipts.
• Cross-phishing in order chats and credential theft.
• Use of hijacked accounts to defraud other users.

Workshop, Phishing in the Order Chat: Teams differentiate between genuine support messages and fraudulent ones, then draft the takedown and revalidation process for reported accounts.

KYC for Individuals: Level 1 and Level 2

• Level 1 data capture and review of identity documents.
• Level 2 revalidation, video selfie liveness checks, and list screening.
• Ensuring the verified identity matches the payment instrument.

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

KYC for Legal Entities and Beneficial Ownership

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

Identity Fraud and Document Forensics

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

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

AML Screening, Sanctions, and PEP

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

Customer Risk Assessment and the Risk-Based Approach

• Evaluating customer, product, channel, geographic, and behavioral risk factors.
• Assigning risk ratings, identifying review triggers, and making treatment decisions.
• Scaling due diligence efforts to match the actual risk level.

Transaction Monitoring and Blockchain Analytics

• Withdrawing approvals based on account age, KYC status, and history.
• Attributing wallets, identifying high-risk counterparties, and tracing funds.
• Assessing chargeback-prone gateways and payment method risks.

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

Evidence Standards for Payment Proof

• Defining acceptable evidence, including statements and unbroken recordings.
• Performing authenticity checks on documents, captures, and metadata.
• Documenting what was verified and what remains unverified.

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

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 resolve a dispute where both buyer and seller hold seemingly genuine proof, defending the final outcome.

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and suspending activity.
• Setting deadlines for partial payments and processing returns to originating accounts.
• Managing refunds to incorrect banks, including fees and resolution timeframes.
• Restricting balances and retaining new deposits.

Exercise, Drafting the Sanction: Participants create actions, notices, and timeframes for three escalating cases, validating them against playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention.
• Utilizing escalation matrices and conducting department head reviews.
• Filing suspicious activity reports and maintaining accurate records.

Capstone: End-to-End Fraud Case

• Conducting order reviews, evidence assessments, and identity revalidation.
• Handling escalations, sanction decisions, and counterparty resolutions.
• Preparing justification memos and undergoing peer review.

Capstone, Full Case Simulation: Teams 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 handling disputed cases.
• Offering guidance on action and sanctions criteria.