In a coordinated effort, the UK's Financial Conduct Authority, along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has launched a crackdown on unlicensed peer-to-peer crypto trading platforms. Eight locations in London were targeted, resulting in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The FCA alleges that these platforms facilitated direct crypto transactions between individuals without adhering to necessary registration and anti-money laundering protocols. Under UK law, crypto exchange providers must 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 pose a significant financial crime risk. Law enforcement views this operation as part of a broader strategy to disrupt channels used for illicit fund movements.
The action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange. As the UK prepares to introduce a comprehensive crypto regulatory framework by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register, warning that dealing with unregistered traders may expose them to risks, including transactions involving stolen funds, and denies them access to the Financial Ombudsman Service or compensation schemes.