In a major crackdown, the UK's Financial Conduct Authority (FCA) has conducted a coordinated raid on eight locations in London that were allegedly operating as unlicensed peer-to-peer crypto trading hubs. The operation, carried out in conjunction with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), 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 crypto transactions between individuals without adhering to the required registration and anti-money laundering protocols. Under UK law, crypto exchange providers must register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country.
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 doing so illegally and pose a significant financial crime risk. The operation is part of a broader effort to disrupt the movement of illicit funds, with law enforcement agencies emphasizing that unregistered traders can enable criminals to launder and spend illegal money.
This recent action builds upon previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products.
As the UK prepares to introduce a more comprehensive regulatory framework for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the potential risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.