In a coordinated effort to combat illicit financial activities, the UK's Financial Conduct Authority (FCA) has launched a crackdown on unlicensed peer-to-peer cryptocurrency trading platforms. The operation, conducted in conjunction with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), targeted eight locations in London.
As a result, cease-and-desist notices were issued at each site, and evidence was collected to support ongoing criminal investigations. The FCA alleges that these platforms were operating without the necessary registration or anti-money laundering controls, posing a significant risk of financial crime. Under UK law, crypto exchange providers are required to register with the FCA, yet 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 are operating illegally and pose a financial crime risk. This operation is part of a broader effort to disrupt the flow of illicit funds.
As DI Ross Flay of SWROCU noted, unregistered traders can facilitate the movement, concealment, and expenditure of illegal funds. The FCA has been actively enforcing regulations, having previously prosecuted operators of illegal crypto ATMs and collaborated with law enforcement to apprehend individuals linked to unregistered crypto exchanges.
Last year, the FCA also took action against offshore platforms engaged in 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 expected 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 a lack of access to the Financial Ombudsman Service or compensation schemes, as well as potential risks associated with transactions involving stolen funds.