In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of hosting illegal peer-to-peer cryptocurrency trading operations. The sites in question were issued cease-and-desist orders, and evidence collected during the raids is currently being used in multiple ongoing criminal investigations. According to the FCA, these sites were believed to be facilitating direct cryptocurrency transactions between individuals without the necessary registration or implementation of anti-money laundering controls, which is a requirement under UK law for any entity operating as a crypto exchange provider.
As of now, there are no registered peer-to-peer crypto traders or platforms in the UK. 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 risk of financial crime.
Law enforcement views this operation as part of a broader strategy to disrupt channels used for the movement of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This move follows previous enforcement actions, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. 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 is advising consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes, and at risk if transactions involve stolen funds.