In a coordinated effort to combat illicit financial activities, the UK's Financial Conduct Authority (FCA), in conjunction with Her Majesty's Revenue and Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight locations in London suspected of operating unauthorized peer-to-peer cryptocurrency trading platforms. The sites, which facilitated direct transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls, pose a significant risk of facilitating financial crimes.
According to the FCA, these platforms, by not registering with the regulatory body, are operating illegally under UK law. The FCA has emphasized that there are currently no registered peer-to-peer cryptocurrency traders or platforms in the UK, underscoring the illicit nature of these operations.
The regulator's executive director of enforcement and market oversight, Steve Smart, highlighted the dangers of unregistered traders, stating that they operate outside the law and significantly increase the risk of financial crimes. Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This crackdown is part of a broader enforcement strategy that includes previous actions against operators of illegal cryptocurrency ATMs and the arrest of individuals associated with unregistered cryptocurrency exchanges.
The FCA has also taken measures against offshore platforms for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrency by October 2027, with a licensing window set to open in September 2026, the current focus remains on ensuring compliance with anti-money laundering regulations and financial promotions standards. The FCA has advised consumers to verify the registration status of firms using its online register and warned of the risks associated with dealing with unregistered traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions involving stolen funds.