In a coordinated effort to combat illicit peer-to-peer cryptocurrency trading, the UK's Financial Conduct Authority (FCA), in conjunction with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight unlicensed trading hubs in London. The operation involved serving cease-and-desist orders and gathering evidence for multiple ongoing criminal investigations. The targeted sites were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to mandatory registration and anti-money laundering protocols.
Under UK law, crypto exchange providers are required to register with the FCA, yet none have done so for peer-to-peer trading. 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 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 follows previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals connected to an unregistered crypto exchange in 2024.
The FCA also took action against the offshore platform HTX for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto products. As the UK prepares to implement a comprehensive regulatory framework for cryptocurrencies by October 2027, with a licensing window set to open in September 2026, the current framework focuses primarily 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, and may also involve the risk of transactions involving stolen funds.