In a coordinated effort to combat illicit financial activities, the UK's Financial Conduct Authority, in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a series of raids on eight locations in London suspected of facilitating unregistered 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. According to the FCA, these platforms were operating without the necessary registration or anti-money laundering measures, thereby increasing the risk of financial crime. Under current UK law, all crypto exchange providers are required to register with the FCA, with no registered peer-to-peer crypto traders or platforms currently operating in the country.
The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders are operating illegally and pose a significant financial crime risk. Law enforcement agencies view this operation as part of broader efforts to disrupt the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder and spend illegal proceeds.
This action follows 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 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 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.