UK Regulators Launch First-Ever Crackdown on Illegal Peer-to-Peer Crypto Trading

Highlights:

• UK regulators targeted eight London sites in their first joint crackdown on illegal peer-to-peer crypto trading.
• The FCA said no peer-to-peer crypto traders are registered, making such business activity illegal.
• Authorities warned that unregistered crypto traders may support money laundering and leave consumers with fewer protections.

The UK’s Financial Conduct Authority (FCA) has launched its first joint crackdown on illegal peer-to-peer crypto trading. It targeted eight locations in London that were running unregistered crypto businesses.

The agency announced on Wednesday that it worked with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU) to carry out the operation. Officers visited each site, issued cease-and-desist letters, and ordered the traders to stop immediately.

In addition, officers collected evidence during the visits. They are now using that evidence in several ongoing criminal investigations. However, the FCA did not disclose the locations involved.

Peer-to-peer crypto trading lets people buy and sell digital assets directly with each other instead of using a centralized exchange. However, in the UK, anyone running that activity as a business must register properly.

FCA, HMRC, AND SWROCU RAID EIGHT LONDON PREMISES IN FIRST UK CRACKDOWN ON ILLEGAL P2P CRYPTO TRADING

The UK's Financial Conduct Authority carried out its first coordinated enforcement operation against illegal peer-to-peer crypto trading, targeting eight London premises in a… pic.twitter.com/TVqeb4K86v

— BSCN (@BSCNews) April 22, 2026

FCA Warns Over Illegal Peer-to-Peer Crypto Trading

FCA said no peer-to-peer crypto traders or platforms are currently registered with it in the country. As a result, any business offering these services without approval is operating illegally. The regulator said unregistered peer-to-peer crypto traders can raise the risk of financial crime. According to the FCA, these operators may help criminals move, hide, or spend illegal money.

Steve Smart, the FCA’s executive director of enforcement and market oversight, said these traders are operating illegally in the UK. He added that the regulator will work with partner agencies and use its powers to stop them.

“Consumers should protect themselves by only dealing with firms registered with the FCA and by remembering that crypto remains a high risk investment,” he added.

The South West Regional Organised Crime Unit also issued a similar warning. Detective Inspector Ross Flay said joint action with the FCA and HMRC helps law enforcement disrupt illegal traders and limit their ability to support money laundering. That language shows the operation was not just a warning exercise. It was part of a wider enforcement effort tied to suspected criminal activity. 

FCA Points to Earlier Cases and Urges Caution

The FCA said this action follows earlier steps against unregistered crypto businesses. It highlighted a case involving a person who ran an illegal crypto ATM network. The regulator also mentioned that it worked with the Metropolitan Police to arrest two people suspected of operating an illegal cryptoasset exchange.

The FCA said consumers can use its Firm Checker to see whether a crypto business has the right permissions. It also reiterated that crypto in the UK remains largely unregulated, except for anti-money laundering rules and financial promotion requirements. As a result, consumers have fewer protections if something goes wrong.

Separately, the United Kingdom is also moving to bring digital assets closer to mainstream finance through a wider payments strategy. On Tuesday, HM Treasury outlined the plan, covering payment services, e-money rules, Open Banking, and digital markets.

🇬🇧 UK Treasury is consolidating payment rules across fiat, stablecoins, and tokenized deposits, with the Financial Conduct Authority set to oversee issuance.

The overhaul merges fragmented frameworks into a single regime, covering stablecoins in payments alongside traditional…

— Watcher.News (@watchernewsx) April 21, 2026