Key facts
- The FCA, HMRC, and Metropolitan Police targeted three London premises on September 10.
- Cease and desist letters were issued to individuals suspected of illegal peer-to-peer crypto trading.
- No peer-to-peer crypto traders are currently FCA-registered in the UK.
- Authorities estimate over £100 billion is laundered through UK corporate structures annually.
- The FCA led a similar crackdown in April, with evidence supporting ongoing criminal investigations.
- New FCA regulations requiring firms to obtain approval to deal with British customers will take effect in October 2027.
The UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs (HMRC) and the Metropolitan Police, has conducted a second operation targeting unregistered peer-to-peer crypto trading in London. On September 10, authorities visited three premises and issued cease-and-desist letters, ordering the cessation of alleged illegal activities.
Peer-to-peer crypto trading allows individuals to transact directly with each other, bypassing centralized exchanges. The FCA highlighted that such unregistered operations can serve as a conduit for moving and laundering illicit funds, with authorities estimating that over £100 billion is laundered through UK corporate structures annually.
This action follows a similar crackdown in April, the evidence from which is now supporting criminal investigations. Steve Smart, the FCA’s executive director of enforcement and market oversight, affirmed the regulator's commitment to disrupting illegal crypto trading. Detective Sergeant Sathish Alalasundaram of the Metropolitan Police acknowledged the evolving challenges in investigating crypto-related crime due to its cross-jurisdictional nature and the speed of fund movement.
The FCA is moving to tighten regulation of the UK's cryptoasset regime. New rules announced in June will require firms to obtain FCA approval to deal with British customers starting in October 2027, with applications opening on September 30. Currently, crypto firms only need to register for anti-money laundering checks. Research commissioned by the FCA indicates that improved regulation could increase investor confidence, with 25% of cryptoasset users stating they would be more likely to invest. Approximately 8% of UK adults currently hold cryptocurrency.
The government has also intensified its focus on combating illicit finance, with the Home Office announcing an anti-money laundering and asset recovery strategy that includes hiring 500 new officers to track dirty money and seize criminal assets.