In a significant move to curb illicit financial activities, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of hosting unlicensed peer-to-peer crypto trading operations. The sites in question were issued cease-and-desist orders, and evidence gathered during the raids is now being used in multiple ongoing criminal investigations. According to the FCA, these platforms were facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing necessary anti-money laundering measures. Under current UK legislation, any entity operating as a crypto exchange must be registered with the FCA, yet there are no registered peer-to-peer crypto traders or platforms in the country.
The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders operating in the UK are acting illegally and pose a significant risk of financial crime. Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous efforts, 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 introduce a more comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the current focus remains on ensuring anti-money laundering compliance and adherence to financial promotion regulations. The FCA is urging consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders can leave users without access to the Financial Ombudsman Service or compensation schemes, exposing them to risks including transactions involving stolen funds.