The UK Financial Conduct Authority conducted a targeted operation on September 10 against three London premises suspected of running illegal peer-to-peer crypto trading businesses. According to FCA reports, cease and desist letters were issued at all three locations as the regulator worked alongside HM Revenue & Customs and the Metropolitan Police Service. The finance regulator did not identify the specific premises targeted in the operation, which represents an extension of the FCA's enforcement campaign against unregistered digital asset activity. As reported by Reuters, the operation was conducted under money laundering and terrorist financing regulations, with authorities emphasizing that there are currently no registered peer-to-peer crypto trading businesses operating in Britain according to the FCA. Legal experts highlight that zero P2P crypto firms currently hold FCA authorization, meaning all commercial peer-to-peer venues in the U.K. are operating illegally.
The FCA's crypto enforcement operations are part of a broader £500 million investment over three years announced by the Home Office to combat organised crime. This new Anti-Money Laundering and Asset Recovery Strategy will deploy 500 new officers across police forces, the National Crime Agency (NCA), and the Crown Prosecution Service to track dirty money and disrupt organised crime networks. The strategy comes alongside impressive results from recent operations, with £350 million of dirty money stripped from criminals and over £1 billion denied in a year-long crackdown. 26 million pounds was returned into victims' pockets, 2,700 illicit finance operations disrupted, and convictions for money laundering increased to almost 4,000.
Peer-to-peer crypto trading involves people buying and selling digital assets directly with one another, with personal transactions not requiring FCA registration. However, anyone conducting such activity as a business in the UK must have appropriate registration. The FCA emphasized that unregistered operators can provide routes for criminals to move and launder illicit funds, as businesses operating outside the registration system avoid controls designed to detect and prevent money laundering. Steve Smart, executive director of enforcement and market oversight at the FCA, stated that "anyone running an unregistered peer-to-peer crypto business should assume we are looking at them." Caroline Black, a consultant at Gherson Solicitors LLP, noted that "this second coordinated enforcement operation in six months confirms the FCA's shift from warnings to active disruption of unregistered P2P crypto businesses, with criminal liability a live risk for any operator trading by way of business without the proper registration."
The September operation signals the end of Britain's 'light-touch' crypto regulation era, as the FCA ramps up enforcement activity ahead of the country's comprehensive crypto framework implementation. Aditya Mittal, managing principal at Capco, emphasized that "following the guidance from the FCA earlier this week, which clarified how the regulatory perimeter of the U.K.'s incoming cryptoasset regime will apply, firms should prioritize understanding which parts of their business fall within scope." The new regulatory guidance covers issuing qualifying stablecoins, operating crypto exchanges, dealing and coordinating deals, safeguarding digital assets and staking activities. The application window runs from September 30 to February 28, 2027, with the UK crypto regulatory framework coming into full force on October 25, 2027.
The September operation extends enforcement activity that began earlier this year, following an April 22 operation that targeted eight London locations. During that earlier action, the FCA worked with HMRC and the South West Regional Organised Crime Unit, with cease and desist letters issued at all eight locations. According to FCA reports, evidence collected during both operations is being used to support ongoing criminal investigations and other enforcement action. The inspections were conducted under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, with authorities continuing to monitor unregistered crypto trading operations across London. The new strategy will strengthen this coordinated approach by investing in new intelligence capabilities, advanced technology and stronger public-private collaboration.
The London operations follow several previous enforcement cases involving crypto businesses operating without FCA registration. One notable case involved Olumide Osunkoya, who pleaded guilty in September 2024 to offenses linked to an illegal crypto ATM network that processed £2.6 million in transactions between December 2021 and September 2023. Osunkoya became the first person in the UK to receive a criminal sentence for unregistered crypto activity, receiving a four-year prison sentence. Separate enforcement action in June 2024 resulted in two London residents being arrested on suspicion of operating an illegal crypto exchange, with authorities believing more than £1 billion in unregistered cryptoassets had been processed through the business.
