In a coordinated effort, the UK's Financial Conduct Authority, along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms. The operation, which took place in London, resulted in the issuance of cease-and-desist notices at eight locations, with evidence gathered to support ongoing criminal investigations. The targeted sites were suspected of facilitating direct cryptocurrency transactions between individuals without obtaining the required registration or implementing adequate anti-money laundering controls.

Under UK law, cryptocurrency exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered in the country. According to Steve Smart, the FCA's executive director of enforcement and market oversight, 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 movement of illicit funds, with unregistered traders potentially enabling criminals to launder and spend illegal proceeds.

This enforcement action builds upon previous steps, 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 for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a more comprehensive regulatory framework for cryptocurrency by October 2027, the current focus remains on anti-money laundering compliance and financial promotions.

The FCA advises consumers to verify the registration status of firms using its online register and warns that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, as well as potential risks associated with stolen funds.