In a coordinated effort, the UK's Financial Conduct Authority, alongside His Majesty's 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 cryptocurrency trading operations. At each site, cease-and-desist orders were issued, and evidence was collected to support ongoing criminal investigations, as reported by the FCA. The targeted sites were allegedly facilitating direct cryptocurrency transactions between individuals without adhering to the mandatory registration requirements or implementing necessary anti-money laundering controls. Under current UK legislation, any entity operating as a cryptocurrency exchange provider must be registered with the FCA, yet there are no registered peer-to-peer cryptocurrency traders or platforms in the country.
According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered peer-to-peer cryptocurrency traders operating in the UK are acting illegally and pose a significant risk of financial crime. This operation is part of broader efforts to disrupt channels used for the movement of illicit funds.
DI Ross Flay of SWROCU noted that unregistered traders can inadvertently enable criminals to launder and spend illegal proceeds. The action follows previous enforcement measures, including the prosecution of operators of illegal cryptocurrency ATMs and the arrest of individuals linked to an unregistered cryptocurrency exchange in 2024. Last year, the FCA also took action against an offshore platform for unlawful financial promotions and expanded its oversight of social media influencers promoting high-risk cryptocurrency products. As the UK prepares to introduce a comprehensive regulatory framework for cryptocurrencies 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 has urged consumers to verify the registration status of firms using its online register and warned that dealing with unregistered P2P traders leaves users without access to the Financial Ombudsman Service or compensation schemes, exposing them to potential risks, including transactions involving stolen funds.