In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms. Eight sites across London were targeted, resulting in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations.
The FCA has stated that these platforms were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to the required registration and anti-money laundering protocols. Under UK law, cryptocurrency exchange providers must register with the FCA, yet currently, there are no registered peer-to-peer cryptocurrency traders or platforms operating within the country.
According to Steve Smart, the FCA's executive director of enforcement and market oversight, 'Unregistered peer-to-peer cryptocurrency traders operating in the UK are doing so illegally and pose a significant financial crime risk.' Law enforcement agencies view this operation as a critical step in disrupting the flow of illicit funds. Detective Inspector Ross Flay of SWROCU noted that unregistered traders can enable criminals to 'move, disguise, and spend illegal money.' This action builds upon previous enforcement measures, including the prosecution of operators of unauthorized cryptocurrency ATMs and the arrest of individuals linked to an unregistered cryptocurrency 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 cryptocurrency products. As the UK prepares to implement a comprehensive regulatory framework for cryptocurrency by October 2027, with a licensing window expected to open in September 2026, the FCA has urged consumers to verify whether firms are registered using its online register. The authority warned that dealing with unregistered peer-to-peer traders leaves users without access to the Financial Ombudsman Service or compensation schemes and may expose them to risks associated with transactions involving stolen funds.