In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer cryptocurrency 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 suspected of facilitating direct crypto transactions between individuals without adhering to necessary registration requirements or implementing anti-money laundering measures. 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 a broader effort to disrupt the flow of illicit funds. Detective Inspector Ross Flay of SWROCU noted that unregistered traders can 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 associated with unregistered crypto exchanges. Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto products. As the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the current focus remains on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify a firm's registration 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 risks associated with stolen funds.