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, marking its first large-scale crackdown on unlicensed peer-to-peer crypto trading. The operation resulted in the issuance of cease-and-desist notices at each site, with evidence gathered to fuel ongoing criminal investigations. The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to the necessary registration requirements or implementing anti-money laundering measures, which is mandatory for all crypto exchange providers operating in the UK. Currently, there are no registered peer-to-peer crypto traders or platforms in the country.
According to the FCA, unregistered peer-to-peer crypto traders operating in the UK are in violation of the law and pose a significant financial crime risk. The operation is part of a broader effort to disrupt the flow of illicit funds, with law enforcement agencies emphasizing that unregistered traders can inadvertently enable criminals to launder money. This enforcement action builds upon previous 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 more comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the current framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA is urging consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders can leave users without access to the Financial Ombudsman Service or compensation schemes, and may also involve the risk of stolen funds.