In a coordinated effort to combat illicit financial activities, the UK's Financial Conduct Authority, in conjunction with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight unauthorized peer-to-peer crypto trading hubs in London. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence, which is currently being utilized in multiple ongoing criminal investigations. The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to the requisite registration requirements or implementing sufficient anti-money laundering controls, thereby posing a significant risk of financial crime. Under UK law, crypto exchange providers are mandated to register with the FCA, yet currently, there are no registered peer-to-peer crypto traders or platforms operating within 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 in violation of the law and pose a substantial financial crime risk. Law enforcement agencies view this operation as part of a broader effort 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 enforcement action builds upon previous measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The FCA has also taken action against offshore platforms engaging in unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products.

As the UK prepares to implement a more comprehensive regulatory framework for crypto by October 2027, 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 increased risks associated with transactions involving stolen funds.