In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of hosting unlicensed peer-to-peer crypto trading operations. The sites in question were allegedly facilitating direct cryptocurrency transactions between individuals without adhering to the necessary registration requirements or implementing adequate anti-money laundering measures. As a result, cease-and-desist orders were issued, and evidence collected will be used in ongoing criminal investigations.
The FCA emphasized that operating as a crypto exchange provider in the UK requires registration, yet currently, no peer-to-peer crypto traders or platforms are legally registered. According to the FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, unregistered traders are acting illegally and pose significant financial crime risks.
Law enforcement views this operation as part of broader efforts to disrupt channels used for illicit fund movements, with unregistered traders potentially enabling criminals to launder money. This recent action follows previous enforcement measures, including prosecutions of illegal crypto ATM operators and the arrest of individuals connected to an unregistered crypto exchange.
The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto products. As the UK prepares to introduce a comprehensive crypto regulatory framework by October 2027, with a licensing window set to open in September 2026, the FCA is advising consumers to verify a firm's registration status using its online register and warning of the risks associated with dealing with unregistered traders, including lack of access to the Financial Ombudsman Service and potential compensation schemes.