In a coordinated effort, the UK's Financial Conduct Authority (FCA) has launched a crackdown on unauthorized peer-to-peer cryptocurrency trading platforms, targeting eight sites across London. This joint operation involved His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU). At each location, cease-and-desist notices were issued, and evidence was collected to support ongoing criminal investigations, as stated by the FCA. The targeted platforms were suspected of facilitating direct cryptocurrency transactions between individuals without adhering to the required registration and anti-money laundering protocols.
Under UK law, crypto exchange providers must 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 acting illegally and pose a significant financial crime risk.
Law enforcement views this operation as part of broader efforts to disrupt channels used for moving illicit funds. DI Ross Flay of SWROCU noted that unregistered traders can enable criminals to launder and spend illegal money.
This enforcement action builds upon previous steps taken by the FCA, including the prosecution 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 introduce a more 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 the registration status of firms using its online register and warns that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes, posing significant risks, especially if transactions involve stolen funds.