In a major enforcement effort, the UK's Financial Conduct Authority (FCA) has conducted a coordinated raid on eight unauthorized peer-to-peer cryptocurrency trading sites across London. The operation, carried out in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls. Under UK law, crypto exchange providers must register with the FCA, and currently, no peer-to-peer crypto traders or platforms are registered in the country. The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders operating in the UK are acting illegally and pose a significant financial crime risk.
Law enforcement agencies view this operation as part of a broader effort to disrupt channels used for illicit fund transfers. According to DI Ross Flay of SWROCU, unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds.
This recent action builds upon previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to an unregistered crypto exchange in 2024. 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 last year.
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 framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify a firm's registration status using its online register and warns that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, and may also involve risks associated with stolen funds.