In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), has conducted a series of raids on eight sites across London suspected of operating as unregistered peer-to-peer crypto trading hubs. The operation resulted in the issuance of cease-and-desist orders at each location, with evidence collected now being utilized in multiple ongoing criminal investigations, according to the FCA. The regulator emphasized that these platforms were allegedly facilitating direct crypto transactions between individuals without adhering to the necessary registration requirements or implementing anti-money laundering controls, which are mandatory under UK law for any entity operating as a crypto exchange provider.
Currently, there are no registered peer-to-peer crypto traders or platforms in the UK, underscoring the illegal nature of these operations and the associated financial crime risks. The FCA's Executive Director of Enforcement and Market Oversight, Steve Smart, highlighted that unregistered peer-to-peer crypto traders in the UK are operating illegally and pose significant financial crime risks. Law enforcement views this operation as part of broader efforts to disrupt channels used for the movement of illicit funds, with DI Ross Flay of SWROCU noting that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds.
This enforcement action follows previous steps taken by the FCA, 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 more comprehensive regulatory framework for crypto by October 2027, with a licensing window anticipated to open in September 2026, the current focus remains on anti-money laundering compliance and financial promotions.
The FCA has urged consumers to verify the registration status of firms using its online register and warned that dealing with unregistered P2P traders may result in lack of access to the Financial Ombudsman Service, compensation schemes, and increased risks associated with transactions involving stolen funds.