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 exposure points: off-platform fiat vs. on-platform crypto.
• Consequences of fraud losses, chargebacks, and bank claims.

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

Regulatory Framework and Supervisory Standards

• FATF Recommendations, VASP obligations, and the travel rule.
• Regulatory oversight by cryptoasset supervisory authorities and exchange licensing.
• Assessing jurisdictional risks, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

• Deviations in payment channels and mismatched payer accounts.
• Triangulation, third-party payers, and the reuse of payment proofs.
• Partial payments, altered amounts, and visually similar figures.

Case Study, Five Recurring Patterns: Participants categorize real anonymized dispute records against five key typologies and pinpoint the control failure in each instance.

False Confirmations, Forged Receipts, and Account Takeover

• Marking orders as paid without actual transfers.
• Manipulated screenshots and fabricated bank receipts.
• Cross-phishing in order chats and credential theft.
• Compromised accounts used to defraud other users.

Workshop, Phishing in Order Chats: Teams distinguish between genuine support messages and fraudulent ones, then formulate a takedown and revalidation strategy for the affected account.

KYC for Individuals: Level 1 and Level 2

• Capturing Level 1 data and reviewing 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 on sample files, documenting discrepancies that necessitate revalidation.

KYC for Legal Entities and Beneficial Ownership

• Reviewing corporate documents, representation powers, and signatories.
• Mapping beneficial ownership chains and identifying control indicators.
• Assessing legal person risk factors and conducting periodic reviews.

Identity Fraud and Document Forensics

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

Lab, Document Forensics: Participants examine tampered documents and screen captures 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, analyzing adverse media, and verifying source of wealth.
• Implementing enhanced due diligence and defining escalation thresholds.

Customer Risk Assessment and the Risk-Based Approach

• Evaluating customer, product, channel, geographic, and behavioral factors.
• Establishing risk ratings, review triggers, and treatment decisions.
• Aligning the depth of due diligence with the actual risk level.

Transaction Monitoring and Blockchain Analytics

• Approving withdrawals based on account age, KYC status, and history.
• Attributing wallets, identifying high-risk counterparties, and tracing funds.
• Assessing risk associated with chargeback-prone gateways and payment methods.

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

Evidence Standards for Payment Proof

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

Lab, Evidence or Artifact: Teams classify a set of submissions into acceptable evidence, insufficient evidence, and probable fabrication, specifying what further information is needed.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties present valid evidence.
• Managing waiting periods for interbank processing and preventive holds.
• Applying documented decision criteria for expired orders.

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

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and suspending services.
• Setting deadlines for partial payments and returning funds to the originating account.
• Handling refunds to incorrect banks, including fees and resolution timelines.
• Managing restricted balances and retaining new deposits.

Exercise, Writing the Sanction: Participants draft actions, notices, and timeframes for three escalating cases, testing them against playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention.
• Utilizing the escalation matrix and department head reviews.
• Filing suspicious activity reports and ensuring proper record-keeping.

Capstone: End-to-End Fraud Case

• Reviewing orders, assessing evidence, and revalidating identities.
• Executing escalations, deciding on sanctions, and resolving counterparty issues.
• Preparing justification memos and undergoing 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 review.

Diagnostic and Advisory Session (Additional Component)

• Auditing current practices and identifying protocol gaps.
• Providing guidance on evidence standards and disputed cases.
• Offering advice on action and sanctions criteria.