In a significant crackdown, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of operating as illegal peer-to-peer crypto trading hubs. The sites were issued cease-and-desist notices, and evidence collected is being used in ongoing criminal investigations.
According to the FCA, these platforms were facilitating direct crypto transactions between individuals without the necessary registration or anti-money laundering measures, which is a requirement under UK law for any crypto exchange provider. The FCA emphasized that there are currently no registered peer-to-peer crypto traders or platforms in the UK, making these operations illegal and a potential conduit for financial crime.
The executive director of enforcement and market oversight at the FCA, Steve Smart, highlighted that unregistered traders pose a significant financial crime risk. This operation is part of broader efforts to disrupt the flow of illicit funds, with law enforcement agencies noting that unregistered traders can enable the laundering of illegal money.
The action follows previous enforcement measures, including the prosecution 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 more 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 advised consumers to verify the registration status of firms using its online register and warned of the risks associated with dealing with unregistered P2P traders, including lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions involving stolen funds.