In a significant operation, the UK's Financial Conduct Authority (FCA), in conjunction with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of coordinated raids targeting eight locations in London suspected of hosting unlicensed peer-to-peer (P2P) crypto trading platforms. The sites were issued cease-and-desist orders, and evidence collected is being utilized in multiple ongoing criminal investigations, as announced by the FCA.
These platforms were allegedly operating without the necessary registration or adherence to anti-money laundering regulations, which is mandatory for all crypto exchange providers in the UK. Currently, there are no registered P2P crypto traders or platforms operating in the country. According to the FCA, any unregistered entity engaging in P2P crypto trading is doing so illegally and poses a substantial risk of financial crime.
Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, emphasized that such unregistered traders are operating outside the law and increase the risk of financial crime. Law enforcement views this operation as a critical step in disrupting the flow of illicit funds. DI Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous efforts by the FCA to prosecute operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to 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. This crackdown comes as the UK is set to introduce a more comprehensive regulatory framework for crypto by October 2027, with a licensing window expected to open in September 2026. The current regulatory framework primarily focuses 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 may result in lack of access to the Financial Ombudsman Service or compensation schemes, and increased risks if transactions involve stolen funds.