In a coordinated effort, the UK's Financial Conduct Authority, 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 gathered during the raids is now being used in multiple ongoing criminal investigations. According to the FCA, these sites were believed to be facilitating direct cryptocurrency transactions between individuals without adhering to the necessary registration requirements or implementing appropriate anti-money laundering controls.
Under current UK law, any entity operating as a cryptocurrency exchange provider must be registered with the FCA. However, the regulator has confirmed that there are no registered peer-to-peer cryptocurrency traders or platforms in the country.
The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer cryptocurrency traders operating in the UK are doing so illegally and pose a significant risk of financial crime. Law enforcement views this operation as part of a broader effort to disrupt the channels used to launder illicit funds. DI Ross Flay of the 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 the arrest of individuals linked to an unregistered cryptocurrency exchange in 2024.
The FCA also took action against the offshore platform HTX for making unlawful financial promotions and expanded its oversight of social media figures 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 compliance with anti-money laundering regulations 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 peer-to-peer traders leaves users without access to the Financial Ombudsman Service or compensation schemes, and may expose them to risks associated with stolen funds.