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 illegal peer-to-peer cryptocurrency trading operations. The sites, which facilitated direct crypto transactions between individuals without adhering to required registration or anti-money laundering protocols, were issued cease-and-desist orders, and evidence collected is being used in ongoing criminal investigations.
The FCA emphasizes that under UK law, crypto exchange providers must register, yet currently, no peer-to-peer crypto traders or platforms are registered. According to Steve Smart, FCA's executive director of enforcement and market oversight, these unregistered traders operate illegally and pose a significant financial crime risk.
The operation aims to disrupt channels used for moving illicit funds, with DI Ross Flay of SWROCU noting that such traders can enable criminals to launder money. This enforcement action follows previous steps against illegal crypto ATMs and unregistered crypto exchanges, and precedes a broader crypto regulatory regime set to be implemented by October 2027.
The FCA advises consumers to verify a firm's registration status and warns of the risks associated with dealing with unregistered traders, including lack of access to the Financial Ombudsman Service or compensation schemes.