In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HMRC and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of hosting illegal peer-to-peer cryptocurrency trading operations. The sites in question were issued cease-and-desist orders, and evidence gathered during the raids is currently being utilized in multiple ongoing criminal investigations. According to the FCA, these platforms were suspected of facilitating direct crypto transactions between individuals without adhering to the mandatory registration requirements or implementing adequate anti-money laundering controls.
Under current UK legislation, all crypto exchange providers are required to register with the FCA, yet there are no registered peer-to-peer crypto traders or platforms operating within 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 in violation of the law and pose a significant risk of financial crime.
Law enforcement views this operation as part of a broader strategy to disrupt the flow of illicit funds. DI Ross Flay of SWROCU noted 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 collaboration with police to apprehend individuals linked to unregistered crypto exchanges. In the previous year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, with a licensing window slated to open in September 2026, the current framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA has urged consumers to verify the registration status of firms using its online register and warned that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, potentially putting users at risk, especially in transactions involving stolen funds.