In a coordinated effort to combat illicit financial activities, the UK's Financial Conduct Authority (FCA), in conjunction with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight unlicensed peer-to-peer crypto trading sites in London. 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 mandatory registration requirements or implementing adequate anti-money laundering controls.
Under UK law, crypto exchange providers are required to 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 in violation of the law and pose a significant risk of financial crime. Law enforcement agencies view this operation as part of a broader strategy to disrupt channels used for the movement of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action follows previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals associated with 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 introduce a more 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 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.