The United Kingdom's Financial Conduct Authority (FCA) has executed coordinated raids on eight locations suspected of operating illegal peer-to-peer (P2P) cryptocurrency trading operations. This marks the regulator's first major enforcement action specifically targeting unregistered P2P crypto trading activities.
The operation was conducted in collaboration with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU). Officials issued cease-and-desist notices on-site, ordering operators to immediately halt their activities while gathering evidence for ongoing criminal investigations.
Steve Smart, the FCA's executive director of enforcement and market oversight, stated: "Unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk." He emphasized that under UK law, anyone operating as a crypto exchange provider must register with the FCA, and the regulator confirmed there are currently no registered peer-to-peer crypto traders or platforms in the country.
DI Ross Flay of SWROCU framed the operation as part of broader efforts to disrupt illicit financial flows, noting that unregistered traders can enable criminals to "move, disguise and spend illegal money." The action builds on previous enforcement measures, including prosecutions of illegal crypto ATM operators and arrests linked to unregistered crypto exchanges in 2024.
This crackdown occurs within the context of a broader regulatory shift. Slav Demchuk, CEO at AMLBot.com, told Cointelegraph that "these raids mark a shift under the incoming FSMA crypto regime, unregistered OTC desks are no longer an AML-registration gap, they're an unauthorised regulated activity, and enforcement will look more like traditional finance." He specifically highlighted that unregulated OTC brokers serve as consistent chokepoints in illicit flows, including "Iran-linked evasion corridors where actors cut off from regulated exchanges use informal desks to move USDT and BTC in and out of fiat."
The FCA's action follows Operation Atlantic in March, a coordinated international enforcement effort involving UK, US, and Canadian authorities that identified over 20,000 victims and secured more than $12 million in suspected criminal proceeds, while tracing over $45 million in additional stolen cryptocurrency.
Looking forward, the UK is preparing to implement a comprehensive crypto regulatory regime by October 2027, with companies expected to be able to apply for authorization starting September 2026. The FCA recently opened a consultation on guidance covering stablecoins, trading platforms, custody, and staking under this new framework.
