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 sites in London suspected of facilitating unregistered peer-to-peer crypto trading. 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 operating without the necessary registration or anti-money laundering controls, which is a requirement for crypto exchange providers in the UK.
As there are currently no registered peer-to-peer crypto traders or platforms in the country, these unregistered entities are deemed to be operating illegally and posing a financial crime risk. 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 doing so illegally and pose a financial crime risk.' Law enforcement views this operation as part of a broader effort to disrupt the movement of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to 'move, disguise and spend illegal money.' This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024.
The FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products last year. As the UK prepares to introduce a more comprehensive regulatory regime for crypto by October 2027, with a licensing window expected to open in September 2026, the current framework focuses primarily on anti-money laundering compliance and financial promotions.
The FCA is urging consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders can 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.