In a landmark operation, the UK's Financial Conduct Authority (FCA) has launched a coordinated crackdown on unlicensed peer-to-peer cryptocurrency trading, targeting eight sites across London. The action, carried out in conjunction with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The FCA alleged that these sites facilitated peer-to-peer cryptocurrency trading without obtaining the necessary registration or implementing anti-money laundering controls, a requirement under UK law for all crypto exchange providers. As there are currently no registered peer-to-peer crypto traders or platforms in the UK, the FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered operators are acting illegally and pose a significant risk of financial crime. Law enforcement viewed the operation as part of a broader effort to disrupt the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder and spend illegal proceeds.
This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to 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 comprehensive regulatory regime for crypto by October 2027, with a licensing window set to open in September 2026, the FCA urged consumers to verify the registration status of firms using its online register and warned of the risks associated with dealing with unregistered traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions involving stolen funds.