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

P2P Exchange Operations and the Fraud Risk Landscape

• The escrow-based order lifecycle and asset release.
• Identifying exposure: off-platform fiat versus on-platform crypto.
• Consequences of fraud loss, chargebacks, and bank claims.

Exercise 1, Map the Exposure: Teams trace one buy order and one sell order from placement to release, identifying every point where off-platform payment breaks 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 risk, grey-list monitoring, and sanctions exposure.

Fraud Typologies in P2P Trading

• Payment channel deviation and mismatched payer accounts.
• Triangulation, third-party payers, and reused payment proof.
• Partial, altered, and visually similar amounts.

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

False Confirmations, Forged Receipts, and Account Takeover

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

Workshop, Phishing in the Order Chat: Teams compare a genuine support message with a fraudulent one, then draft the takedown and revalidation path for the reported account.

KYC for Individuals: Level 1 and Level 2

• Level 1 data capture and identity document review.
• Level 2 revalidation, video-selfie liveness checks, and list screening.
• Matching the verified identity to the payment instrument.

Lab, Onboarding Under Pressure: Participants conduct Level 1 and Level 2 reviews on sample files and record the discrepancies that trigger revalidation.

KYC for Legal Entities and Beneficial Ownership

• Corporate documents, representation powers, and signatories.
• 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 bypass, deepfake attempts, and injection attacks.
• Revalidation triggers following a dispute or compromise claim.

Lab, Document Forensics: Participants inspect 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

• Customer, product, channel, geography, and behavioural factors.
• Risk rating, review triggers, and treatment decisions.
• Scaling due diligence efforts to match 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.
• Risk assessment of chargeback-prone gateways and payment methods.

Case Study, The Large Withdrawal: Participants review 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: statements and uninterrupted recordings.
• Authenticity checks on documents, captures, and metadata.
• Accurately recording what was verified and what was not.

Lab, Evidence or Artifact: Teams categorise a pack of submissions into acceptable evidence, insufficient evidence, and probable fabrication, and state what should be requested instead.

Disputed Evidence and Interbank Delays

• Resolving cases where both parties submit 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 in which the buyer and seller each hold apparently genuine proof, and defend the outcome.

Action and Sanctions Playbook

• Freezing collateral, restricting accounts, and suspension procedures.
• Handling partial payment deadlines and returns to the originating account.
• Managing refunds to incorrect banks: fees and resolution timeframes.
• Restricting balances and retaining new deposits.

Exercise, Write the Sanction: Participants draft the action, notice, and timeframe for three escalating cases and test them against the playbook criteria.

Case Management, Documentation, and Escalation

• Maintaining case files, internal notes, and evidence retention.
• Using the escalation matrix and department head review processes.
• Filing suspicious activity reports and maintaining records.

Capstone: End-to-End Fraud Case

• Order review, evidence assessment, and identity revalidation.
• Escalation, sanctions decision, and counterparty resolution.
• Preparing a justification memo and undergoing peer review.

Capstone, Full Case Run: Each team handles a complete simulated case from the first 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 handling disputed cases.
• Guidance on actions and sanctions criteria.