In a significant move to curb illicit activities, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a coordinated raid on eight unlicensed peer-to-peer crypto trading hubs in London. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to required registration and anti-money laundering protocols. 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 operators pose a financial crime risk.
Law enforcement views this operation as part of a broader effort to disrupt channels used for moving illicit funds, with unregistered traders potentially enabling the laundering of illegal money. This action follows previous enforcement measures, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The FCA also took action against an offshore platform for unlawful financial promotions 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 FCA is urging consumers to verify the registration status of firms using its online register, warning that dealing with unregistered traders can result in a lack of access to the Financial Ombudsman Service or compensation schemes and may involve risks related to stolen funds.