In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms. The operation, which involved raids on eight locations in London, aimed to halt the activities of these unlicensed sites and gather evidence for potential criminal investigations. The FCA stated that these platforms were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to the necessary registration requirements or implementing adequate anti-money laundering controls. Under UK law, cryptocurrency exchange providers must register with the FCA, and currently, there are no registered peer-to-peer cryptocurrency traders or platforms in the country.
According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, operating as an unregistered peer-to-peer cryptocurrency trader in the UK is illegal and poses a significant financial crime risk. The operation is part of a broader effort to disrupt the flow of illicit funds. As noted by DI Ross Flay of SWROCU, unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous steps taken by the FCA, including the prosecution of operators of illegal cryptocurrency ATMs and the arrest of individuals linked to unregistered cryptocurrency exchanges.
Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies by October 2027, with a licensing window expected to open in September 2026, the current focus remains 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 peer-to-peer 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.