In a major crackdown, the UK's Financial Conduct Authority, in conjunction 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 operating unlicensed peer-to-peer crypto trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The targeted sites were allegedly facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering measures. Under UK law, crypto exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered.
According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered peer-to-peer crypto traders are operating illegally and pose a significant risk of financial crime. Law enforcement views this operation as a crucial step in disrupting channels used for illicit fund movements. DI Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. 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.
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 introduce 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 the registration status of firms using its online register and warns that dealing with unregistered P2P traders may result in lack of access to the Financial Ombudsman Service, compensation schemes, and increased risk of transaction issues involving stolen funds.