In a coordinated effort, 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 suspected of facilitating unregistered peer-to-peer crypto trading. The sites, which enable individuals to buy and sell cryptocurrency directly with one another, were found to be operating without the necessary registration or anti-money laundering measures in place. As a result, cease-and-desist notices were issued at each location, and evidence gathered will be used to inform ongoing criminal investigations. The FCA emphasizes that under UK law, all crypto exchange providers must register with the authority, yet currently, there are no registered peer-to-peer crypto traders or platforms in the country.
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.' The operation is part of a broader effort to disrupt the movement of illicit funds, with law enforcement agencies recognizing that unregistered traders can inadvertently enable criminals to launder money. This enforcement action builds upon previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The regulator has also taken action against offshore platforms engaging in unlawful financial promotions and has expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a more comprehensive regulatory regime for crypto by October 2027, with a licensing window set to open in September 2026, the FCA is urging consumers to verify the registration status of firms using its online register.
Additionally, the regulator warns that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes, and may also expose them to risks associated with transactions involving stolen funds.