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 operating unauthorized 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 adequate anti-money laundering controls.
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 operating in the UK are acting illegally and pose a significant financial crime risk.
Law enforcement views this operation as part of broader efforts to disrupt channels used for moving illicit funds, with unregistered traders potentially enabling criminals to launder money. This enforcement action follows previous steps taken by the FCA, including prosecutions of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. 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 implement a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered P2P traders, including lack of access to the Financial Ombudsman Service or compensation schemes and potential involvement in transactions with stolen funds.