In a coordinated effort, 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, targeting unlicensed peer-to-peer crypto trading platforms. The operation resulted in the issuance of cease-and-desist notices and the gathering of evidence for ongoing criminal investigations. The FCA has stated that these sites were suspected of facilitating direct crypto transactions between individuals without the required registration or anti-money laundering measures, which is a violation of UK law.
As the FCA has not registered any peer-to-peer crypto traders or platforms, these operations are deemed illegal and pose a significant 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 views this operation as part of a broader effort to disrupt the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder and spend illegal money. This action is the latest in a series of enforcement steps, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products.
As the UK prepares to introduce a new regulatory regime for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.