In a coordinated effort, the UK's Financial Conduct Authority, along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer crypto trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The FCA has stated that these platforms were operating without the necessary registration or anti-money laundering measures, posing a significant risk of financial crime.
Under UK law, crypto exchange providers are required to register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country. The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders are operating illegally and pose a financial crime risk. Law enforcement agencies view this operation as part of a broader effort to disrupt the flow of illicit funds.
According to DI Ross Flay of SWROCU, unregistered traders can facilitate the movement, concealment, and expenditure of 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 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 implement a more comprehensive regulatory regime for crypto by October 2027, 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, as well as potential risks associated with transactions involving stolen funds.