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 launched a crackdown on unlicensed peer-to-peer crypto trading platforms. The operation, which targeted eight sites across London, resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The FCA stated that these platforms were suspected of facilitating peer-to-peer crypto trading without the necessary registration or anti-money laundering controls, which is a requirement under UK law.
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.
Law enforcement agencies view this operation as part of a broader effort to disrupt the movement of illicit funds. The action is an extension of previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the collaboration with police to arrest individuals linked to unregistered crypto exchanges. 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 more comprehensive regulatory regime for crypto by October 2027, the current framework focuses primarily on anti-money laundering compliance and financial promotions.
The FCA has urged consumers to verify the registration status of firms using its online register and warned that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, as well as potential risks associated with stolen funds.