In a coordinated effort, 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 raids on eight locations in London suspected of hosting unlicensed peer-to-peer cryptocurrency trading activities. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The targeted sites were allegedly facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls, as stipulated by UK law.
The FCA emphasizes that any entity operating as a crypto exchange provider must be registered, yet currently, there are no registered peer-to-peer crypto traders or platforms in the UK. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered peer-to-peer crypto traders are operating illegally and pose a significant financial crime risk. Law enforcement views this operation as part of a broader strategy to disrupt channels used for illicit fund movements, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder and spend illegal funds.
This enforcement action follows previous steps taken by the FCA, including prosecutions of operators of illegal crypto ATMs and collaboration with police to apprehend 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 framework for crypto by October 2027, with a licensing window set to open in September 2026, the current focus remains 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 lack of access to the Financial Ombudsman Service, compensation schemes, and increased risks associated with transactions involving stolen funds.