In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unlicensed peer-to-peer cryptocurrency trading platforms in London. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were suspected of facilitating direct cryptocurrency transactions between individuals without the necessary registration or anti-money laundering controls, which is a requirement under UK law. 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, unregistered traders operating in the UK are doing so illegally and pose a significant risk of financial crime.
Law enforcement views this operation as part of a broader effort to disrupt the movement of illicit funds. The action is an extension of previous enforcement measures, including the prosecution of operators of illegal cryptocurrency ATMs and the collaboration with police to apprehend individuals linked to unregistered cryptocurrency exchanges.
The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies 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 the registration status of firms using its online register and warns that dealing with unregistered 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.