The Financial Conduct Authority (FCA) carried out coordinated enforcement actions against suspected illegal peer-to-peer crypto traders at three London premises on September 10, working in conjunction with HM Revenue & Customs (HMRC) and the Metropolitan Police.
Coordinated Enforcement Operation
During the operation, FCA officers, together with tax and law enforcement authorities, visited each site and issued cease and desist letters, ordering the cessation of all potentially unlawful activities. The action was conducted under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, which applies to all UK-based crypto businesses engaged in buying and selling of digital assets.
A spokesperson from the FCA stated that this was the second such operation, following an earlier sweep in April. Evidence gathered during that initial crackdown is now supporting ongoing criminal investigations. All businesses engaging in crypto asset activities in the UK must be registered with the regulator. The FCA confirmed that there are currently no registered peer-to-peer crypto trading businesses operating in the country, meaning any such enterprise is considered unregistered by default.
The joint operation targeted individuals believed to be running crypto trading as a business, who had not registered with the appropriate authorities. This unregulated status potentially enables the movement and laundering of illicit funds through the financial system, according to the FCA.
“Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them,” stated Steve Smart, executive director of enforcement and market oversight at the FCA.
Policing and Practical Challenges
Detective Sergeant Sathish Alalasundaram of the Metropolitan Police highlighted the difficulties involved in investigating such cases, noting the technical complexity of cryptocurrencies and the ease with which assets can be moved across borders. He emphasized that law enforcement is adapting its tactics as illicit operators evolve their methods.
Unregistered traders bypass the anti-money laundering controls that come with FCA oversight, making them an attractive conduit for criminal activity. The FCA previously secured a four-year conviction for Olumide Osunkoya due to the operation of an unlawful crypto ATM network, and has helped arrest suspects involved with illegal exchanges.
Currently, crypto assets in the UK are regulated only under money laundering laws and rules governing financial promotions. No crypto-specific licensing regime is in place at this time, leaving most peer-to-peer platforms beyond direct oversight.
This regulatory landscape is set to shift significantly from October 25, 2027, when new FCA rules tailored to digital asset businesses will be introduced. Applications for registration under the new regime will open starting September 30, 2027, providing a formal route to operate legally within the UK.
Mini dictionary: Financial Conduct Authority (FCA), HM Revenue & Customs (HMRC), and the Metropolitan Police are key regulatory and law enforcement bodies in the United Kingdom, respectively overseeing financial conduct, taxation, and criminal investigations.
| Regulator/Body | Main Role |
|---|---|
| FCA | Supervision of financial markets and enforcement against illegal activity |
| HMRC | Tax collection and investigation of financial crimes |
| Metropolitan Police | Law enforcement and criminal investigations in London |
The FCA emphasized its ongoing commitment to targeting illegal financial activity in the crypto sector, and indicated that unregistered businesses can expect further regulatory scrutiny and potential prosecution.
