In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, marking its first major operation against unlicensed peer-to-peer cryptocurrency trading. The sites in question were issued cease-and-desist orders, and evidence gathered is being used in ongoing criminal investigations. According to the FCA, these platforms were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to required registration and anti-money laundering protocols.
Under UK law, crypto exchange providers must register with the FCA, yet currently, there are no registered peer-to-peer crypto traders or platforms. The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders are operating illegally and pose a significant financial crime risk.
This operation is part of broader efforts to disrupt channels used for moving illicit funds, with law enforcement highlighting the role unregistered traders play in enabling criminals to launder money. The action follows previous enforcement measures, including prosecutions of operators of illegal crypto ATMs and collaboration with police to arrest individuals linked to unregistered crypto exchanges.
Last year, 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 implement a comprehensive regulatory framework for crypto by October 2027, with a licensing window set to open in September 2026, the current focus remains on anti-money laundering compliance and financial promotions. The FCA is advising 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 lack of access to the Financial Ombudsman Service or compensation schemes and potential involvement in transactions with stolen funds.