In a significant crackdown, the UK's Financial Conduct Authority (FCA) has conducted a coordinated operation against eight unlicensed peer-to-peer crypto trading sites in London, in partnership with HM Revenue & Customs and the South West Regional Organised Crime Unit. The sites were found to be operating without necessary registration or adherence to anti-money laundering controls, thereby posing a risk of financial crime.
The FCA has issued cease-and-desist notices and gathered evidence for multiple criminal investigations. According to the FCA, these sites facilitated direct crypto transactions between individuals without proper oversight, contravening UK laws that require crypto exchange providers to register with the FCA. Currently, there are no registered peer-to-peer crypto traders or platforms in the UK. The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders are operating illegally and pose a significant financial crime risk.
This operation is part of broader efforts to disrupt channels used for illicit fund movements. The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds.
This enforcement action builds upon previous steps, including prosecutions of illegal crypto ATM operators and the arrest of individuals associated with an unregistered crypto exchange. Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers 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 current focus remains on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify a firm's registration status using its online register and warns that dealing with unregistered P2P traders may result in lack of access to the Financial Ombudsman Service or compensation schemes, and increased risk of transactions involving stolen funds.