In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unauthorized peer-to-peer crypto trading platforms in London. The operation targeted eight locations, resulting in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The FCA alleged that these sites facilitated direct crypto transactions between individuals without adhering to registration requirements or implementing anti-money laundering controls, which is mandatory for crypto exchange providers in the UK.
As there are no registered peer-to-peer crypto traders or platforms in the country, such operations are deemed illegal and pose significant financial crime risks. The FCA's executive director of enforcement and market oversight emphasized that unregistered traders operating in the UK are breaking the law and increase the risk of financial crime. Law enforcement views this operation as part of a broader strategy to disrupt channels used for illicit fund transfers, with unregistered traders potentially enabling criminals to launder money.
This enforcement action follows previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. The regulator 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 implement a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the FCA advises consumers to verify a firm's registration status using its online register and warns of the risks associated with dealing with unregistered traders, including lack of access to the Financial Ombudsman Service or compensation schemes and potential involvement in transactions with stolen funds.