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 asset release mechanisms.
• Identifying exposure points: off-platform fiat versus on-platform crypto.
• Consequences of fraud losses, chargebacks, and bank claims.

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

Regulatory Framework and Supervisory Expectations

• FATF Recommendations, VASP obligations, and the travel rule.
• Cryptoasset regulatory oversight and exchange licensing requirements.
• Geographical risks, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

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

Case Study: Five Common Patterns: Participants will classify anonymized dispute records against five fraud typologies and identify the failed control in each instance.

False Confirmations, Forged Receipts, and Account Takeovers

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

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

Individual KYC: Level 1 and Level 2

• Level 1 data collection and identity document verification.
• Level 2 revalidation, video selfie liveness checks, and list screening.
• Correlating verified identity with payment instruments.

Lab: Onboarding Under Pressure: Participants will conduct Level 1 and Level 2 reviews using 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 entities and periodic reviews.

Identity Fraud and Document Forensics

• Forged, borrowed, and synthetic identities.
• Bypassing liveness checks, deepfake attempts, and injection attacks.
• Triggers for revalidation following disputes or compromise claims.

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

AML Screening, Sanctions, and PEPs

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

Customer Risk Assessment and Risk-Based Approach

• Evaluating customer, product, channel, geographic, and behavioral factors.
• Risk rating, review triggers, and treatment decisions.
• Calibrating due diligence efforts to 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 will evaluate 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: statements and uninterrupted recordings.
• Authenticity verification for documents, captures, and metadata.
• Documenting what was verified versus what was not.

Lab: Evidence or Artifact: Teams will categorize submissions into acceptable evidence, insufficient evidence, and probable fabrications, specifying what additional evidence is required.

Disputed Evidence and Interbank Delays

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

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

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and suspensions.
• Deadlines for partial payments and returning funds to originating accounts.
• Handling refunds to incorrect banks: fees and resolution timelines.
• Managing restricted balances and retaining new deposits.

Exercise: Drafting Sanctions: Participants will create actions, notices, and timelines 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.

Capstone: End-to-End Fraud Case

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

Capstone: Full Case Execution: Each team will 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)

• Assessment of current practices and protocol gaps.
• Guidance on evidence standards and handling disputed cases.
• Guidance on action and sanctions criteria.