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 conducted a series of raids on eight sites in London suspected of operating as unauthorized peer-to-peer crypto trading hubs. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations. According to the FCA, these sites were allegedly involved in facilitating direct crypto transactions between individuals without adhering to the required registration and anti-money laundering protocols. Under UK law, crypto exchange providers must register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country.
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 financial crime risk. Law enforcement views this operation as part of a broader strategy to disrupt the flow of illicit funds. DI Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal money.
This enforcement action builds upon previous efforts, including the prosecution of operators of unauthorized crypto ATMs and collaboration with police to apprehend individuals linked to an unregistered crypto exchange in 2024. The FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media figures promoting high-risk crypto products last year. As the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, with a licensing window set 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 P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, and may also involve risks related to stolen funds.