In a joint effort with HM Revenue & Customs and the South West Regional Organised Crime Unit, the UK's Financial Conduct Authority has launched a crackdown on unlicensed peer-to-peer crypto trading platforms. Eight locations in London were targeted, with officials issuing cease-and-desist notices and gathering evidence for potential criminal investigations. The FCA claims these sites were facilitating P2P crypto trading without proper registration or anti-money laundering controls, posing a significant risk of financial crime. Under UK law, crypto exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered.
The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered traders operating in the UK are doing so illegally and pose a significant financial crime risk. Law enforcement views this operation as part of a broader effort to disrupt the movement of illicit funds. The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can enable criminals to launder and spend illegal money. This enforcement action builds upon previous efforts, including the prosecution of illegal crypto ATM operators and the arrest of individuals linked to an unregistered crypto exchange.
The FCA also took action against an offshore platform for unlawful financial promotions and expanded 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, 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 traders, including lack of access to the Financial Ombudsman Service and compensation schemes.