In a coordinated effort, the UK's Financial Conduct Authority, along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer crypto trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing necessary anti-money laundering controls. Under current UK law, crypto exchange providers must register with the FCA, yet no peer-to-peer crypto traders or platforms are currently registered. 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 acting illegally and pose a significant risk of financial crime. Law enforcement views this operation as part of broader efforts to disrupt the movement of illicit funds, with unregistered traders potentially enabling criminals to launder money.
This crackdown follows previous enforcement actions, 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 for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to implement a 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 risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions involving stolen funds.