In a coordinated effort to combat illicit peer-to-peer cryptocurrency trading, the UK's Financial Conduct Authority (FCA) has conducted a series of raids on eight locations in London, in conjunction with HM Revenue & Customs and the South West Regional Organised Crime Unit. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for multiple ongoing criminal investigations. The targeted sites were suspected of facilitating peer-to-peer cryptocurrency transactions without obtaining the necessary registration or implementing anti-money laundering controls, as required by UK law.
The FCA emphasized that operating as a crypto exchange provider without registration is illegal and increases the risk of financial crime. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, 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 the flow of illicit funds. Detective Inspector Ross Flay of the SWROCU noted that unregistered traders can enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024.
The FCA also took action against the offshore platform HTX 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 expected to open in September 2026, the current framework primarily focuses 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 P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, as well as potential risks associated with transactions involving stolen funds.