In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a sweep of eight sites in London suspected of operating illegal peer-to-peer cryptocurrency trading platforms. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The FCA alleges that these platforms facilitated direct cryptocurrency transactions between individuals without adhering to mandatory registration and anti-money laundering protocols. Under current UK legislation, crypto exchange providers are required to register with the FCA, with no registered peer-to-peer crypto traders or platforms currently operating in the country.
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. The operation is part of broader efforts to disrupt the flow of illicit funds, with law enforcement highlighting the role unregistered traders play in enabling criminals to launder money. This crackdown follows previous enforcement actions, including prosecutions of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. 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 cryptocurrency by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.