In a coordinated effort, the UK's Financial Conduct Authority, along 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 operating unauthorized peer-to-peer cryptocurrency trading platforms. The sites in question were allegedly facilitating direct transactions between individuals without adhering to the required regulatory standards, including registration with the FCA and implementation of anti-money laundering controls.
As a result, cease-and-desist notices were issued, and evidence was gathered to support ongoing criminal investigations. The FCA has emphasized that operating as a crypto exchange provider in the UK without proper registration is illegal and poses significant financial crime risks. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered peer-to-peer crypto traders are operating illegally and contribute to the risk of financial crime.
Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder money. This enforcement action follows previous efforts by the FCA to combat illegal crypto activities, including the prosecution of operators of unauthorized crypto ATMs and the arrest of individuals associated with unregistered crypto 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 crypto products.
As the UK prepares to implement a more comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the potential risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes and the potential for transactions involving stolen funds.