In a joint operation with HMRC and the South West Regional Organised Crime Unit, the UK's Financial Conduct Authority has conducted a series of raids on eight locations in London suspected of facilitating unregistered peer-to-peer crypto trading. The sites in question were issued cease-and-desist notices, and evidence gathered is being used to inform multiple ongoing criminal investigations. The FCA has stated that these platforms were operating without the necessary registration or anti-money laundering controls, posing a significant risk of financial crime.
Under current UK law, all crypto exchange providers are required to register with the FCA, yet no peer-to-peer crypto traders or platforms have done so. 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.' The operation is part of a broader effort to disrupt the movement of illicit funds, with law enforcement officials noting that unregistered traders can enable criminals to launder money. This crackdown builds on previous enforcement actions, 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 and social media figures promoting high-risk crypto products. As the UK prepares to introduce a new 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 P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.