In a major crackdown, the UK's Financial Conduct Authority (FCA) has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer crypto trading platforms. The operation, carried out in collaboration with HMRC and the South West Regional Organised Crime Unit, resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The FCA alleges that these platforms were facilitating peer-to-peer crypto trading without registering with the authority or implementing necessary anti-money laundering controls, posing a significant risk of financial crime. Under UK law, crypto exchange providers are required to register with the FCA, and currently, there are no registered peer-to-peer crypto traders or platforms in the country.
According to Steve Smart, the FCA's executive director of enforcement and market oversight, 'unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk.' The operation is part of a broader effort to disrupt the flow of illicit funds, with law enforcement agencies warning that unregistered traders can enable criminals to launder and spend illegal money. This crackdown builds on previous enforcement actions, 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 and social media figures promoting high-risk crypto products. As the UK prepares to introduce a new regulatory regime for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.