UK regulator raids suspected illegal P2P crypto trading sites

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UK regulator raids crypto sites

Highlights

FCA, HM Revenue & Customs, and South West Regional Organised Crime Unit raided eight suspected illegal peer-to-peer crypto trading sites in the UK, issuing cease-and-desist notices and collecting evidence.
No peer-to-peer crypto traders or platforms are registered with the FCA, and operating such trading without registration violates UK anti-money laundering rules.
The FCA's enforcement actions align with a broader tightening of crypto regulations, as the new Financial Services and Markets Act crypto regime is expected to take effect in 2027 with authorization applications opening September 2026.

Enforcement action targets unregistered trading

As reported by the Financial Conduct Authority, the regulator worked with HM Revenue & Customs and the South West Regional Organised Crime Unit on Wednesday to inspect eight sites suspected of facilitating illegal peer-to-peer crypto trading.

Officials issued cease-and-desist notices at the locations while collecting evidence for ongoing criminal investigations. Steve Smart, the FCA's executive director of enforcement and market oversight, says unregistered peer-to-peer crypto traders operating in the UK are acting illegally and pose a financial crime risk.

Peer-to-peer crypto trading allows individuals to buy and sell digital assets directly rather than through centralized exchanges. In the UK, that activity requires registration under anti-money laundering rules, and the FCA says no peer-to-peer crypto traders or platforms are currently registered with the watchdog.

Broader crypto rulebook and market impact

The raids are the FCA's first operation specifically focused on peer-to-peer crypto trading, but they build on earlier enforcement involving illegal crypto ATM networks and arrests connected to unlicensed exchanges.

Earlier this month, authorities in the UK, the U.S. and Canada froze millions of dollars tied to crypto scams under Operation Atlantic, a coordinated action carried out in March. Officials say the operation identified more than 20,000 victims across the three countries, secured over $12 million in suspected criminal proceeds and traced more than $45 million in additional stolen crypto linked to fraud networks.

Slav Demchuk, chief executive of AMLBot.com, told Cointelegraph that the raids signal a shift under the incoming Financial Services and Markets Act crypto regime, with unregistered over-the-counter desks moving from an anti-money laundering registration gap to an unauthorized regulated activity. The FCA also opened a consultation earlier this month on guidance for its crypto regulatory regime, which is expected to take effect in 2027, with firms able to apply for authorization from September 2026.

Our earlier coverage looked at how recent UK regulatory and tax rule changes reshaped retail access to crypto exchange-traded notes (ETNs) after the FCA lifted its ban. We noted that HMRC restricted new crypto ETN purchases in standard stocks-and-shares ISAs, pushing eligibility toward Innovative Finance ISAs and leaving investors with limited practical platform options while the FCA’s broader crypto rulebook continues to take shape.

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