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 launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms. The operation, which targeted eight sites across London, resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The FCA stated that these platforms were suspected of facilitating direct cryptocurrency transactions between individuals without obtaining the required registration or implementing adequate anti-money laundering controls, which is mandatory for crypto exchange providers in the UK.
Currently, there are no registered peer-to-peer crypto traders or platforms in the country. 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 significant risk of financial crime. Law enforcement agencies view this operation as part of a broader effort to disrupt channels used to launder illicit funds. DI Ross Flay of SWROCU noted that unregistered traders can enable criminals to conceal and spend illegal money.
This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and collaboration with police to arrest 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 figures promoting high-risk crypto products.
As the UK prepares to implement a comprehensive regulatory framework for crypto by October 2027, with a licensing window expected to open in September 2026, the current framework primarily focuses 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, and may also involve risks associated with stolen funds.