In a coordinated effort to combat illicit peer-to-peer crypto trading, the UK's Financial Conduct Authority, in collaboration with HMRC and the South West Regional Organised Crime Unit, has conducted a series of raids on eight sites across London. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence that will be used in ongoing criminal investigations. The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to the required registration and anti-money laundering protocols. Under UK law, crypto exchange providers must register with the FCA, and 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 acting illegally and pose a significant financial crime risk. Law enforcement agencies view this operation as part of a broader effort to disrupt the flow of illicit funds. The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can enable criminals to launder and spend illegal funds.
This enforcement action builds upon previous efforts, 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 introduce a comprehensive regulatory regime 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 a firm's registration 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, as well as potential risks associated with stolen funds.