In a coordinated effort, the UK's Financial Conduct Authority, 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 facilitating unlicensed peer-to-peer cryptocurrency trading. 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 operating without the necessary registration or anti-money laundering controls, which is a requirement under UK law for crypto exchange providers. Currently, there are no registered peer-to-peer crypto traders or platforms in the UK, making these operations illegal and a potential conduit for financial crime.
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 doing so illegally and pose a financial crime risk.' This operation is part of broader efforts to disrupt the flow of illicit funds. Law enforcement officials, including DI Ross Flay of SWROCU, have highlighted that unregistered traders can inadvertently enable criminals to launder money. The action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of 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 traders may result in lack of access to the Financial Ombudsman Service, compensation schemes, and potential risks associated with transactions involving stolen funds.