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 conducted a series of raids on eight unlicensed peer-to-peer cryptocurrency trading sites in London. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The targeted platforms were suspected of facilitating peer-to-peer cryptocurrency transactions without adhering to the required registration and anti-money laundering regulations.
Under UK law, crypto exchange providers must register with the FCA, 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 acting 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.
The 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. The FCA 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 more comprehensive regulatory framework for cryptocurrencies by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the potential risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.