In a joint operation, the UK's Financial Conduct Authority (FCA), Her Majesty's Revenue and Customs (HMRC), and the South West Regional Organised Crime Unit (SWROCU) have conducted a coordinated sweep of eight sites in London suspected of facilitating unregistered peer-to-peer crypto trading. The sites, which allowed individuals to buy and sell cryptocurrencies directly with one another, were found to be operating without the necessary registration or anti-money laundering controls, posing a significant risk of financial crime.
The FCA has issued cease-and-desist notices and gathered evidence for potential criminal investigations. Under UK law, crypto exchange providers are required to 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 doing so illegally and pose a financial crime risk.' Law enforcement agencies view the operation as part of a broader effort to disrupt the movement of illicit funds. The DI Ross Flay of SWROCU noted that unregistered traders can enable criminals to 'move, disguise and spend illegal money.' This enforcement action builds on previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to an unregistered crypto exchange in 2024. The FCA has also taken action against offshore platforms and expanded oversight of social media figures promoting high-risk crypto products.
As the UK prepares to introduce a new regulatory regime 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 potential risks of dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.