In a joint operation with HMRC and the South West Regional Organised Crime Unit, the UK's Financial Conduct Authority has conducted a series of raids on eight locations in London suspected of hosting illegal peer-to-peer crypto trading activities. The sites, which allowed individuals to buy and sell cryptocurrencies directly with each other, were found to be operating without the necessary registration or anti-money laundering controls. As a result, officials issued cease-and-desist notices and gathered evidence for ongoing criminal investigations.
The FCA emphasized that under UK law, all crypto exchange providers must register with the authority, and currently, there are no registered peer-to-peer crypto traders or platforms 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.
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 money. The FCA has previously taken enforcement action against operators of illegal crypto ATMs and worked with police to arrest individuals linked to unregistered crypto exchanges.
The authority has also expanded its oversight of social media figures promoting high-risk crypto products and taken action against offshore platforms engaging in unlawful financial promotions. As the UK prepares to introduce a new regulatory regime for crypto 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.