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 major operation against illegal peer-to-peer cryptocurrency trading in London. The operation involved raids on eight locations, resulting in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. The FCA stated that these sites were suspected of facilitating peer-to-peer cryptocurrency trading without the required registration or anti-money laundering controls, which is a violation of UK law. Currently, there are no registered peer-to-peer cryptocurrency traders or platforms in the UK, and the FCA has warned that unregistered operators pose a financial crime risk.
According to Steve Smart, the FCA's executive director of enforcement and market oversight, 'unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk.' Law enforcement agencies view this operation as part of a broader effort to disrupt the flow of illicit funds. Detective Inspector Ross Flay of SWROCU noted that unregistered traders can enable criminals to launder and spend illegal money. This enforcement action builds on previous efforts by the FCA to prosecute operators of illegal cryptocurrency ATMs and unregistered cryptocurrency exchanges.
Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory regime for cryptocurrency by October 2027, with a licensing window expected to open in September 2026, the FCA has urged consumers to verify the registration status of firms using its online register and warned of the risks associated with dealing with unregistered traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.