The UK's Financial Conduct Authority (FCA), in collaboration with HMRC and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of hosting unauthorized 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 allegedly operating without the necessary registration or anti-money laundering controls, posing a significant risk of financial crime.
Under UK law, crypto exchange providers are required to register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country. The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that 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 flow of illicit funds. The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can enable criminals to launder and spend illegal proceeds.
This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024. The FCA also took action against the offshore platform HTX for 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 regime for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders can result in a lack of access to the Financial Ombudsman Service or compensation schemes, as well as potential risks associated with transactions involving stolen funds.