In a significant move, the UK's Financial Conduct Authority (FCA) has conducted a large-scale operation targeting eight locations in London, aiming to curb unauthorized peer-to-peer cryptocurrency trading. The operation, carried out in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, involved issuing cease-and-desist notices and collecting evidence for potential criminal investigations.
The FCA claims that these sites were operating without the necessary registration or anti-money laundering controls, thereby posing a risk of financial crime. Under UK law, crypto exchange providers must register with the FCA, but 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 peer-to-peer crypto traders are operating illegally and pose a financial crime risk. Law enforcement views this operation as part of a broader effort to disrupt the flow of illicit funds.
The South West Regional Organised Crime Unit's DI Ross Flay noted that unregistered traders can facilitate the movement, concealment, and spending of illegal money. This action follows earlier enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. The FCA has also taken action against offshore platforms and expanded its oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, the current focus remains on anti-money laundering compliance and financial promotions.
The FCA advises consumers to verify a firm's registration using its online register and warns that dealing with unregistered P2P traders can leave users without access to the Financial Ombudsman Service or compensation schemes, and may involve risks related to stolen funds.