In a major crackdown, the UK's Financial Conduct Authority (FCA) has conducted a coordinated raid on eight unlicensed peer-to-peer crypto trading sites in London, in collaboration with His Majesty's Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU). The operation involved issuing cease-and-desist notices and gathering evidence for multiple ongoing criminal investigations.
The targeted sites were suspected of facilitating unregistered P2P crypto trading, which poses a significant risk of financial crime due to the lack of required registration and anti-money laundering controls. Under UK law, crypto exchange providers must register with the FCA, and currently, no peer-to-peer crypto traders or platforms are registered in the country. According to Steve Smart, the FCA's executive director of enforcement and market oversight, unregistered P2P crypto traders operating in the UK are doing so illegally and pose a significant financial crime risk.
The operation is part of a broader effort to disrupt the movement of illicit funds, with law enforcement agencies emphasizing that unregistered traders can enable criminals to launder and spend illegal money. This enforcement action builds upon previous steps taken by the FCA, including the prosecution of operators of illegal crypto ATMs and the arrest of individuals linked to unregistered crypto exchanges. The FCA has also taken action against offshore platforms and social media figures promoting high-risk crypto products.
As the UK prepares to introduce a more comprehensive 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 risks associated with dealing with unregistered P2P traders, including the lack of access to the Financial Ombudsman Service or compensation schemes.