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 locations in London suspected of hosting illegal peer-to-peer cryptocurrency trading activities. 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 facilitating direct cryptocurrency transactions between individuals without adhering to the necessary registration requirements or implementing anti-money laundering measures. Under UK law, cryptocurrency exchange providers are mandated to register with the FCA, and currently, there are no registered peer-to-peer cryptocurrency traders or platforms operating in the country.
The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered peer-to-peer cryptocurrency traders operating in the UK are acting illegally and pose a significant risk of financial crime. Law enforcement views this operation as part of a broader effort to disrupt the flow of illicit funds. According to DI Ross Flay of SWROCU, unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds.
This enforcement action builds upon previous efforts, including the prosecution of operators of illegal cryptocurrency ATMs and collaboration with police to apprehend individuals linked to unregistered cryptocurrency exchanges. The FCA has also taken action against offshore platforms for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies 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 traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, potentially leading to risks associated with stolen funds.