In a collaborative effort, the UK's Financial Conduct Authority (FCA), His Majesty's Revenue & Customs (HMRC), and the South West Regional Organised Crime Unit (SWROCU) have conducted a coordinated crackdown on unauthorized peer-to-peer (P2P) cryptocurrency trading operations in London, targeting eight locations. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for multiple ongoing criminal investigations, as confirmed by the FCA.
The targeted sites were suspected of facilitating P2P cryptocurrency transactions without the required registration or implementation of anti-money laundering controls, which is a violation of UK law. The FCA requires all crypto exchange providers to register, and currently, there are no registered P2P crypto traders or platforms in the country. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered P2P 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 the flow of illicit funds.
Detective Inspector Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous measures, 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 the offshore platform HTX 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 focuses primarily 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.