In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unlicensed peer-to-peer cryptocurrency trading platforms. The operation targeted eight locations in London, resulting in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
According to the FCA, these platforms were suspected of facilitating direct crypto transactions between individuals without adhering to required registration and anti-money laundering regulations. Under UK law, crypto exchange providers must register with the FCA, yet currently, there are no registered peer-to-peer crypto traders or platforms. 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 acting illegally and pose 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 unregistered traders potentially enabling criminals to launder money. Building on previous enforcement actions, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange, the FCA continues to tighten its grip on the crypto sector. This move comes ahead of the UK's planned introduction of a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026. The current regulatory focus is 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 traders may expose users to risks, including the potential involvement of stolen funds, and denies them access to the Financial Ombudsman Service or compensation schemes.