In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HMRC and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London suspected of facilitating unregistered peer-to-peer crypto trading. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were allegedly operating without the necessary registration or anti-money laundering controls, posing a significant risk of financial crime. Under UK law, crypto exchange providers are required to register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered.
According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered traders are operating illegally and pose a significant financial crime risk. The operation is part of a broader effort to disrupt the movement of illicit funds, with law enforcement agencies highlighting the role of unregistered traders in enabling criminals to launder money.
This crackdown builds on previous enforcement actions, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. As the UK prepares to introduce a more comprehensive regulatory regime for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered traders, including the lack of access to compensation schemes and the potential for transactions involving stolen funds.