In a major crackdown, the UK's Financial Conduct Authority (FCA) has launched a coordinated operation against eight unlicensed peer-to-peer crypto trading sites in London, in collaboration with HMRC and the South West Regional Organised Crime Unit. The sites were issued cease-and-desist notices, and evidence gathered is being used in multiple ongoing criminal investigations. The FCA alleges that these sites facilitated direct crypto transactions between individuals without adhering to necessary registration and anti-money laundering protocols.
Under UK law, crypto exchange providers must register with the FCA, but currently, no peer-to-peer crypto traders or platforms are registered. According to the FCA's executive director of enforcement and market oversight, Steve Smart, unregistered traders operating in the UK are doing so illegally and pose a significant financial crime risk. Law enforcement views this operation as part of a broader effort to disrupt the flow of illicit funds. The action follows previous enforcement measures, including prosecutions of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024.
The FCA also took action against an offshore platform for unlawful financial promotions and expanded oversight of social media figures promoting high-risk crypto products. As the UK prepares to introduce a comprehensive regulatory framework for crypto by October 2027, the FCA is urging consumers to verify the registration status of firms using its online register and warning of the risks associated with dealing with unregistered traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.