In a coordinated effort, the UK's Financial Conduct Authority (FCA), in collaboration with HM 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 activities. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The targeted sites were allegedly facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering measures.
Under UK law, crypto exchange operators must register with the FCA, yet currently, no peer-to-peer crypto traders or platforms are registered. The FCA's executive director of enforcement and market oversight emphasized that unregistered operators are acting illegally and pose a significant risk of financial crime. Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds.
The action is part of broader enforcement efforts, including past prosecutions of illegal crypto ATM operators and the arrest of individuals linked to an unregistered crypto exchange. Additionally, the FCA has taken action against offshore platforms for unlawful financial promotions and expanded its 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, with a licensing window set to open in September 2026, the FCA advises consumers to verify the registration status of firms using its online register and warns of the risks associated with dealing with unregistered entities, including lack of access to the Financial Ombudsman Service or compensation schemes and potential involvement with stolen funds.