In a coordinated effort, the UK's Financial Conduct Authority (FCA) has launched a major operation against unauthorized peer-to-peer crypto trading, raiding eight sites in London in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit. At each location, officials issued orders to cease operations and gathered evidence for ongoing criminal investigations, according to the FCA. The targeted sites were suspected of enabling individuals to buy and sell cryptocurrencies directly without adhering to required registration or anti-money laundering protocols. Under UK law, crypto exchange providers must register with the FCA, and currently, no peer-to-peer crypto traders or platforms are registered in the country.
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 significant risk of financial crime. Law enforcement views this operation as part of a broader effort to disrupt channels used to move illicit funds.
DI Ross Flay of SWROCU noted that unregistered traders can facilitate the movement, concealment, and expenditure of illegal funds. This action follows earlier enforcement measures, including the prosecution of operators of illegal crypto ATMs and collaboration with police to arrest individuals linked to unregistered crypto exchanges. Last year, the FCA also took action against offshore platform HTX for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products.
The crackdown occurs as the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, with a licensing window expected to open in September 2026. The current framework primarily focuses on anti-money laundering compliance and financial promotions.
The FCA advises consumers to verify a firm's registration using its online register and warns that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes, potentially exposing them to risks if transactions involve stolen funds.