In a major crackdown on illicit cryptocurrency activities, 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. The operation targeted unlicensed peer-to-peer crypto trading platforms that were operating without the necessary registration or anti-money laundering measures, posing significant financial crime risks. At each site, cease-and-desist notices were issued, and evidence was collected to fuel ongoing criminal investigations.
The FCA emphasized that under UK law, all crypto exchange providers must register with the authority, highlighting that currently, no peer-to-peer crypto traders or platforms are legally registered in the country. The FCA's executive director of enforcement and market oversight, Steve Smart, warned that unregistered peer-to-peer crypto traders are operating illegally and pose a significant financial crime risk. Law enforcement officials view this operation as part of broader efforts to dismantle channels used for moving illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can facilitate the movement, concealment, and expenditure of illegal money.
This enforcement action builds upon previous steps, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend 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 comprehensive regulatory regime for crypto 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 cautions that dealing with unregistered P2P traders can leave users without access to the Financial Ombudsman Service or compensation schemes, exposing them to risks, including transactions involving stolen funds.