In a coordinated effort, the UK's Financial Conduct Authority (FCA), along with HM Revenue & Customs and the South West Regional Organised Crime Unit, has conducted a series of raids on eight locations in London, targeting unlicensed peer-to-peer cryptocurrency trading platforms. The operation resulted in the issuance of cease-and-desist notices and the collection of evidence for ongoing criminal investigations.
The FCA has stated that these platforms were operating without the necessary registration or anti-money laundering measures, posing a significant risk of financial crime. Under UK law, all cryptocurrency exchange providers must register with the FCA, and currently, there are no registered peer-to-peer cryptocurrency traders or platforms in the country. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, 'unregistered peer-to-peer cryptocurrency traders operating in the UK are doing so illegally and pose a significant financial crime risk.' Law enforcement agencies view this operation as part of a broader effort to disrupt the flow of illicit funds. Detective Inspector Ross Flay of the SWROCU noted that unregistered traders can facilitate the movement, disguise, and expenditure of illegal money.
This enforcement action builds upon previous efforts, including the prosecution of operators of illegal cryptocurrency ATMs and the arrest of individuals linked to unregistered cryptocurrency 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 cryptocurrency products.
As the UK prepares to implement a more comprehensive regulatory framework for cryptocurrency by October 2027, with a licensing window set to open in September 2026, the FCA has urged consumers to verify the registration status of firms using its online register. Additionally, the FCA has warned that users dealing with unregistered peer-to-peer traders lack access to the Financial Ombudsman Service or compensation schemes and may face significant risks if transactions involve stolen funds.