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 operating as unlicensed peer-to-peer crypto trading hubs. The operation involved issuing cease-and-desist orders and gathering evidence for potential criminal investigations.
The FCA has stated that these sites were allegedly facilitating direct cryptocurrency transactions between individuals without adhering to necessary registration procedures or implementing anti-money laundering controls, which are mandatory under UK law for crypto exchange providers. Currently, there are no registered peer-to-peer crypto traders or platforms in the UK, making these operations illegal and increasing the risk of financial crimes. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered traders pose a significant financial crime risk.
Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable the laundering of illegal money. This action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto 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 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 lack of access to the Financial Ombudsman Service or compensation schemes, and increased risks, particularly if transactions involve stolen funds.