In a coordinated effort, 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 sites in London suspected of operating as unlicensed peer-to-peer crypto trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The FCA emphasized that these sites were operating outside the law, as they lacked the necessary registration and anti-money laundering controls required for crypto exchange providers. Currently, there are no registered peer-to-peer crypto traders or platforms in the UK. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered peer-to-peer crypto traders are operating illegally and pose a significant risk of financial crime. Law enforcement views this operation as part of a broader effort to disrupt the flow of illicit funds.
The action is consistent with previous enforcement measures, 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 more comprehensive regulatory framework 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 potential risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.