The UK’s Financial Conduct Authority (FCA) has initiated its first enforcement undertaking on unlawful peer-to-peer trading of crypto trading
The regulator announced in a press release on Wednesday that it collaborated with the South West Regional Organized Crime Unit (SWROCU) and HM Revenue and Customs (HMRC). They jointly attacked suspected illegal trading at various sites in London.
The FCA claims that enforcement agencies raided eight sites that are believed to have operated a business of illegally trading peer-to-peer cryptocurrencies.
Officers issued cease-and-desist letters at each site, ordering the traders to stop the activity immediately. The FCA has not identified the eight locations involved.
The regulator reported that there are several current criminal cases under investigation that are currently being supported by evidence that has been obtained during the inspections.
This demonstrates that this was not an isolated warning operation, but a larger enforcement initiative that may result in additional lawsuits.
Peer-to-peer crypto trading happens when people buy and sell digital assets directly with one another instead of using a centralized exchange.
In the UK, such an activity is also subject to anti-money laundering regulations and must be duly registered as appropriate.
The FCA said there are currently no peer-to-peer crypto traders or platforms registered with it in the country, which means anyone offering such services in the UK without approval is operating outside the law.
FCA says illegal traders create financial crime risks
The regulator made clear that its concern goes beyond licensing alone. Steve Smart, the FCA’s executive director of enforcement and market oversight, said unregistered peer-to-peer crypto traders in the UK are operating illegally and pose a financial crime risk.
“Consumers should protect themselves by only dealing with firms registered with the FCA and by remembering that crypto remains a high risk investment,” he said.
DI Ross Flay of the South West Regional Organized Crime Unit said the joint operation aimed to disrupt unregistered traders. He said these traders may be helping criminals move, hide, and use illegal money.
“By working with our colleagues at the FCA and HMRC we are able to effectively target and disrupt unregistered peer-to-peer crypto traders operating illegally. As law enforcement, we want to stop these traders providing a route for criminals to move, disguise and spend illegal money,” Ross Flay stated.
The action fits a broader UK crypto enforcement trend
The latest operation did not come out of nowhere. The FCA said it has already taken enforcement action against unregistered cryptoasset activity in the past.
That encompasses the indictment of one alleged to be running a rogue crypto ATM system. It further claimed that in June 2024, it collaborated with the Metropolitan Police Service to apprehend two individuals suspected of operating an unlicensed cryptoasset exchange.
The move also fits the FCA’s wider enforcement posture. In recent months and years, the regulator has taken part in larger campaigns against unlawful financial promotions and other unauthorized activity.
While those cases were not all about crypto trading itself, they show the FCA is using coordinated action more often when it believes consumers or the financial system may be at risk.
What UK crypto users should take from this
For ordinary users, the main takeaway is simple. Not every crypto service operating in the market is approved to do so.
The FCA warned people not to deal with any crypto company before checking whether it is officially registered. It said users can do this through its Firm Checker tool.
The regulator had also noted that crypto in the UK is yet to be fully regulated.
Currently, the key regulations mainly encompass financial promotions and money laundering. Due to that, individuals might have a higher risk and less protection in case anything goes wrong.
This new enforcement drive follows the UK’s development of a broader crypto rulebook. On April 15, the FCA initiated a consultation on how the future regime should operate, and the wider framework will commence on October 25, 2027.
The regulator indicated that it is now formulating guidelines for companies in anticipation of that rollout.
Simultaneously, HM Treasury is undertaking payment reforms that would introduce stablecoins and tokenized deposits into a single, more transparent legal framework alongside traditional and electronic money.
The plan is meant to support innovation as digital payments grow, while keeping consumer protections in place.