In a major crackdown on illicit peer-to-peer crypto trading, 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 trading hubs 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 necessary registration requirements or implementing anti-money laundering controls, which is a legal mandate in the UK for crypto exchange providers. Currently, there are no registered peer-to-peer crypto traders or platforms in the country, making these operations illegal and posing significant financial crime risks. 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 broader efforts to sever channels used for the movement of illicit funds, with unregistered traders potentially enabling criminals to launder money.
This enforcement action follows previous steps taken by the FCA, 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 implement a comprehensive regulatory regime for crypto by October 2027, with a licensing window set to open in September 2026, the current framework emphasizes 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 involve risks associated with stolen funds.