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 suspected of hosting illegal peer-to-peer crypto trading activities. These sites were allegedly operating without the necessary registration or anti-money laundering controls, posing significant financial crime risks. The FCA issued cease-and-desist orders and collected evidence for ongoing criminal investigations.
According to the FCA, these platforms facilitated direct crypto transactions between individuals without adhering to UK regulations, which mandate registration for crypto exchange providers. Currently, no peer-to-peer crypto traders or platforms are registered in the UK. The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders are operating illegally and increase the risk of financial crime.
Law enforcement views this operation as part of a broader strategy to disrupt channels used for illicit fund transfers. Detective Inspector Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. This enforcement action builds upon previous efforts, including prosecutions of operators of illegal crypto ATMs and collaboration with police to apprehend 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 influencers promoting high-risk crypto products.
As the UK prepares to introduce 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 advises consumers to verify a firm's registration status using its online register and warns that dealing with unregistered P2P traders may result in lack of access to the Financial Ombudsman Service, compensation schemes, and increased risks associated with potentially stolen funds.