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, conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer crypto trading hubs. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The FCA identified these sites as potentially facilitating peer-to-peer crypto transactions without adhering to mandatory registration requirements or implementing anti-money laundering controls.
Under UK law, crypto exchange providers must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered traders operating in the UK are acting illegally and pose a significant financial crime risk. Law enforcement views this operation as part of broader efforts to disrupt the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable the laundering of illegal money.
This action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto exchanges. 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 introduce a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, 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 and potential involvement with stolen funds.