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, has conducted a series of raids on eight locations in London suspected of hosting unlicensed peer-to-peer cryptocurrency trading operations. At each site, cease-and-desist orders were issued, and evidence was gathered to support ongoing criminal investigations. The FCA has stated that these platforms were allegedly facilitating direct cryptocurrency transactions between individuals without obtaining the necessary registration or implementing required anti-money laundering controls.
Under UK law, crypto exchange providers must register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms operating in the country. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, 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 the movement of illicit funds.
Detective Inspector Ross Flay of SWROCU noted that 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 crypto ATMs and collaboration with police to apprehend individuals linked to unregistered crypto 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 crypto products.
As the UK prepares to implement a comprehensive regulatory framework for cryptocurrencies 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. Additionally, the FCA warned that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes and may expose them to risks, including transactions involving stolen funds.