In a coordinated effort to combat illegal peer-to-peer cryptocurrency 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 locations in London. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were suspected of facilitating P2P crypto trading without the necessary registration or anti-money laundering controls, which is required by UK law. Currently, there are no registered peer-to-peer crypto traders or platforms in the UK. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered P2P crypto traders operating in the UK are doing so illegally and pose a significant financial crime risk.
Law enforcement agencies view this operation as part of a broader effort to disrupt the movement of illicit funds. The action is an extension of previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. Last year, the FCA also took action against an offshore platform 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, 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 P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential involvement of stolen funds in transactions.