In a significant move, the UK's Financial Conduct Authority (FCA) has conducted a coordinated operation to crack down on unauthorized peer-to-peer cryptocurrency trading, targeting eight sites in London. This joint effort involved the FCA, His Majesty's Revenue & Customs (HMRC), and the South West Regional Organised Crime Unit (SWROCU).
At each location, cease-and-desist notices were issued, and evidence was collected to support ongoing criminal investigations. According to the FCA, these sites were suspected of facilitating direct cryptocurrency transactions between individuals without the required registration or anti-money laundering controls, which are mandatory for crypto exchange providers in the UK. 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 operating as an unregistered peer-to-peer crypto trader in the UK is illegal and poses a significant risk of financial crime. Law enforcement views this operation as part of broader efforts to disrupt channels used for moving illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can enable criminals to launder and spend illegal money. This enforcement action builds on previous steps, 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 last year. As the UK prepares to introduce a comprehensive regulatory regime for crypto by October 2027, with a licensing window set to open in September 2026, the current framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify whether firms are registered using its online register and warns that dealing with unregistered P2P traders can leave users without access to the Financial Ombudsman Service or compensation schemes, exposing them to risks such as transactions involving stolen funds.