In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight locations in London suspected of hosting unlicensed peer-to-peer (P2P) cryptocurrency trading operations. The sites in question were found to be facilitating direct transactions between individuals without adhering to the required registration and anti-money laundering protocols.
According to the FCA, cease-and-desist orders were issued at each site, and evidence collected is now being used in multiple ongoing criminal investigations. The FCA emphasizes that under UK law, any entity operating as a cryptocurrency exchange must be registered with the FCA, and currently, there are no registered P2P crypto traders or platforms in the country. Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, highlighted that unregistered P2P crypto traders operating in the UK are doing so illegally and pose a significant risk of financial crime.
The operation is part of broader efforts to disrupt channels used for moving illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder money. This action follows previous enforcement steps, including the prosecution of operators of illegal cryptocurrency ATMs and the arrest of individuals linked to unregistered crypto exchanges. The FCA has also taken action against offshore platforms for unlawful financial promotions and has expanded its oversight of social media figures promoting high-risk cryptocurrency products.
As the UK prepares to implement a comprehensive regulatory framework for cryptocurrency 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 the lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions to involve stolen funds.