In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight locations in London suspected of hosting illegal peer-to-peer (P2P) cryptocurrency trading operations. The sites were served with cease-and-desist orders, and evidence gathered during the raids is now being used in multiple ongoing criminal investigations, according to the FCA.
The regulatory body stated that these platforms were facilitating direct cryptocurrency transactions between individuals without adhering to the necessary registration requirements or implementing adequate anti-money laundering measures. Under UK law, all cryptocurrency exchange providers are mandated to register with the FCA, yet currently, there are no registered P2P crypto traders or platforms operating in the country.
The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered P2P crypto traders operating in the UK are acting illegally and pose a significant risk of financial crime. Law enforcement officials view this operation as part of a broader strategy to disrupt channels used for the movement of illicit funds. Detective Inspector Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous steps taken by the FCA, including the prosecution of operators of illegal cryptocurrency ATMs and collaboration with police to apprehend 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 influencers promoting high-risk cryptocurrency products. As the UK prepares to implement a more comprehensive regulatory framework for cryptocurrencies 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 is advising consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders may expose users to risks, including the potential involvement of stolen funds, and lack of access to the Financial Ombudsman Service or compensation schemes.