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 sites in London suspected of engaging in unauthorized peer-to-peer cryptocurrency trading. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The targeted sites were allegedly facilitating direct cryptocurrency transactions between individuals without adhering to the required registration and anti-money laundering protocols.
Under current UK legislation, all cryptocurrency exchange providers must register with the FCA, yet no peer-to-peer cryptocurrency traders or platforms are currently registered. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered peer-to-peer cryptocurrency traders operating in the UK are acting illegally and pose a significant financial crime risk.
Law enforcement views this operation as part of a broader strategy to disrupt the flow of illicit funds. DI Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action follows previous measures 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 unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk cryptocurrency products.
As the UK prepares to implement a comprehensive regulatory framework for cryptocurrencies by October 2027, with a licensing window set 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 peer-to-peer traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, and may also involve risks associated with stolen funds.