In a significant move to curb illicit financial activities, the UK's Financial Conduct Authority (FCA) has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer cryptocurrency trading hubs. 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 FCA has emphasized that these unregistered platforms, which facilitate direct cryptocurrency transactions between individuals, pose a significant risk of financial crime due to their lack of registration and anti-money laundering controls.
Under UK law, all cryptocurrency exchange providers are required to register with the FCA, and currently, there are no registered peer-to-peer cryptocurrency traders or platforms in the country. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered peer-to-peer cryptocurrency traders operating in the UK are doing so illegally and pose a significant financial crime risk.
The operation is part of a broader effort to disrupt the flow of illicit funds, with law enforcement agencies highlighting the role of unregistered traders in enabling criminals to launder and spend illegal proceeds. This crackdown builds on previous enforcement actions, including the prosecution of operators of illegal cryptocurrency ATMs and the arrest of individuals linked to an unregistered cryptocurrency exchange. The FCA has also taken action against offshore platforms and social media figures promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory regime for cryptocurrency 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 traders, including the lack of access to the Financial Ombudsman Service and compensation schemes.