In a coordinated effort, the UK's Financial Conduct Authority, in conjunction with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unlicensed peer-to-peer cryptocurrency trading platforms in London. The operation targeted eight sites, resulting in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. According to the FCA, these platforms were suspected of facilitating peer-to-peer cryptocurrency trading without adhering to the required registration and anti-money laundering protocols. Under UK law, cryptocurrency 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. Detective Inspector Ross Flay of the SWROCU noted that unregistered traders can enable criminals to launder and spend illegal proceeds.
This 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 in 2024. The FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products last year. As the UK prepares to introduce a comprehensive regulatory regime for crypto by October 2027, the current framework focuses primarily on anti-money laundering compliance and financial promotions.
The FCA advises consumers to verify a firm's registration 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.