In a coordinated effort, the UK's Financial Conduct Authority, 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, targeting unlicensed peer-to-peer crypto trading hubs. The operation resulted in the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations. The targeted sites were suspected of facilitating direct crypto transactions between individuals without adhering to mandatory registration requirements or implementing adequate anti-money laundering controls. 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.
The FCA's executive director of enforcement and market oversight, Steve Smart, emphasized that unregistered peer-to-peer crypto traders operating in the UK are acting illegally and pose a significant financial crime risk. Law enforcement agencies view this operation as part of a broader effort to disrupt channels used for illicit fund transfers.
According to DI Ross Flay of SWROCU, unregistered traders can inadvertently enable criminals to launder and spend illegal funds. This enforcement action builds upon previous efforts, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. In the past year, the FCA has also 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 more comprehensive regulatory framework for crypto by October 2027, with a licensing window expected to open in September 2026, the current framework primarily focuses on anti-money laundering compliance and financial promotions. The FCA advises consumers to verify the registration status of firms using its online register and warns that dealing with unregistered P2P traders may result in a lack of access to the Financial Ombudsman Service or compensation schemes, increasing the risk of transactions involving stolen funds.