In a coordinated effort, the UK's Financial Conduct Authority, along 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 orders and the collection of evidence for ongoing criminal investigations. The FCA stated that these platforms were suspected of facilitating direct crypto transactions between individuals without proper registration or adherence to anti-money laundering regulations. Under UK law, crypto exchange providers are required to register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country.
The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto 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 flow of illicit funds. According to DI Ross Flay of SWROCU, unregistered traders can enable criminals to launder and spend illegal money. This action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024.
The FCA also took action against an offshore platform 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 expected to open in September 2026, the current framework focuses primarily on 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 also involve risks associated with stolen funds.