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 conducted a series of raids on eight locations in London suspected of operating unauthorized peer-to-peer cryptocurrency trading platforms. The sites in question were issued cease-and-desist notices, and evidence gathered during the operation is being utilized in ongoing criminal investigations.
According to the FCA, these platforms were facilitating direct cryptocurrency transactions between individuals without adhering to the required registration and anti-money laundering controls, thus posing a significant risk of financial crime. Under current UK law, all crypto exchange providers must register with the FCA, yet there are no registered peer-to-peer crypto traders or platforms operating within 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 substantial financial crime risk. Law enforcement agencies view this operation as part of a broader strategy to disrupt the flow of illicit funds, with DI Ross Flay of SWROCU highlighting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds.
This enforcement action builds upon previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The UK is set to introduce a more comprehensive regulatory framework for cryptocurrency by October 2027, with a licensing window slated to open in September 2026.
The FCA is advising consumers to verify the registration status of firms using its online register and warning that dealing with unregistered P2P traders may 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.