In a major operation, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unauthorised peer-to-peer cryptocurrency trading platforms. The sweep, which targeted eight locations across London, resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The FCA alleges that these platforms facilitated direct cryptocurrency transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering measures.
Under UK law, crypto exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered operators are acting illegally and pose a significant risk of financial crime. Law enforcement views this operation as part of broader efforts to disrupt the flow of illicit funds.
The action follows previous enforcement measures, including prosecutions of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto products.
As the UK prepares to introduce a comprehensive crypto regulatory framework by October 2027, with a licensing window set to open in September 2026, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered traders, including lack of access to the Financial Ombudsman Service or compensation schemes.