In a coordinated effort, the UK's Financial Conduct Authority, in conjunction with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer cryptocurrency trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. According to the FCA, these platforms were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls.
Under UK law, cryptocurrency exchange providers are required to register with the FCA, with no registered peer-to-peer crypto traders or platforms currently operating in the country. The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders in the UK are operating illegally and pose a significant risk of financial crime. Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds.
Detective Inspector Ross Flay of SWROCU noted that unregistered traders can enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous efforts, including the prosecution of operators of illegal cryptocurrency 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 cryptocurrency products.
As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies by October 2027, with a licensing window set to open in September 2026, the current focus remains 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 limited access to the Financial Ombudsman Service or compensation schemes, and increased risks associated with transactions involving stolen funds.