In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight unlicensed peer-to-peer crypto trading sites in London. 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 the required registration and anti-money laundering regulations.
As per UK law, crypto exchange providers must 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 acting illegally and pose a significant financial crime risk.
Law enforcement views this operation as part of a broader strategy to disrupt the flow of illicit funds. According to DI Ross Flay of SWROCU, unregistered traders can enable criminals to launder and spend illegal money. This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk crypto products.
As the UK prepares to implement a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the current framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify the registration status of firms using its online register and warns that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, and may also involve risks associated with stolen funds.