In a concerted effort to combat illicit financial activities, the UK's Financial Conduct Authority (FCA), in tandem with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer crypto trading platforms. The operation involved issuing cease-and-desist orders and collecting evidence for ongoing criminal investigations. According to the FCA, these platforms were suspected of facilitating direct crypto transactions between individuals without adhering to the necessary registration and anti-money laundering protocols. Under UK law, crypto exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered.
The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered traders operate illegally and pose a significant risk of financial crime. Law enforcement views this operation as a crucial step in severing channels used for the movement of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder money. This enforcement action follows 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.
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 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 can result in a lack of access to the Financial Ombudsman Service, compensation schemes, and increased risks, particularly if transactions involve stolen funds.