In a coordinated effort, the UK's Financial Conduct Authority, in collaboration with HMRC and the South West Regional Organised Crime Unit, has launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms. The operation, which targeted eight sites across London, resulted in the issuance of cease-and-desist notices and the collection of evidence for multiple ongoing criminal investigations. The FCA alleges that these platforms were operating without the required registration or anti-money laundering controls, which is a violation of UK law. Currently, there are no registered peer-to-peer crypto traders or platforms in the country.
According to the FCA's executive director of enforcement and market oversight, Steve Smart, unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a significant financial crime risk. Law enforcement views this operation as part of a broader effort to disrupt the movement of illicit funds. The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can facilitate the laundering of illegal money. This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto 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 crypto products. As the UK prepares to implement a more comprehensive regulatory regime for crypto by October 2027, with a licensing window expected 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 may expose users to risks, including the potential involvement of stolen funds, and lack of access to the Financial Ombudsman Service or compensation schemes.