In a significant move, the UK's Financial Conduct Authority (FCA) has conducted a coordinated raid on eight unlicensed peer-to-peer cryptocurrency trading hubs in London. The operation, carried out in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The targeted sites were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls.
Under UK law, crypto exchange providers must register with the FCA, and currently, no peer-to-peer crypto traders or platforms are registered in the country. The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a significant financial crime risk. Law enforcement agencies view this operation as part of a broader effort to disrupt the flow of illicit funds. The action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange.
The FCA has also taken action against offshore platforms and expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies by October 2027, 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 P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential involvement of stolen funds in transactions.