FCA cracks down on illegal peer to peer crypto traders in London

The UK Financial Conduct Authority has targeted three London premises suspected of running illegal peer to peer crypto trading businesses, extending an enforcement campaign against unregistered digital asset activity.

Summary

• FCA targeted three London premises suspected of running illegal peer to peer crypto trading businesses in a Sept. 10 operation.
• Cease and desist letters were issued at all three locations as the FCA worked alongside HMRC and the Metropolitan Police.
• No peer to peer crypto businesses are currently registered with the FCA, while evidence from an April operation is supporting ongoing investigations.

According to the FCA, the operation was carried out on Sept. 10 alongside HM Revenue & Customs and the Metropolitan Police Service. Cease and desist letters were issued at all three locations, requiring traders to stop any suspected illegal crypto business.

Peer to peer crypto trading involves people buying and selling digital assets directly with one another. Personal transactions do not require FCA registration, but anyone conducting the activity by way of business in the UK must have the appropriate registration. No peer to peer crypto trading businesses are currently registered with the regulator.

The FCA said unregistered operators can provide a route for criminals to move and launder illicit funds because businesses operating outside its registration system avoid controls designed to detect and prevent money laundering.

"Working with partners, we continue to track and disrupt illegal crypto activity," Steve Smart, executive director of enforcement and market oversight at the FCA, said. "Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them."

FCA expands crackdown on illegal peer to peer crypto trading

The latest operation extends enforcement activity that began earlier this year. In April, the FCA and partner agencies targeted eight London locations suspected of hosting unregistered peer to peer crypto businesses, crypto.news previously reported.

During the April 22 operation, the FCA worked with HMRC and the South West Regional Organised Crime Unit. Cease and desist letters were issued at all eight locations, while evidence collected during the inspections was retained for criminal investigations.

The regulator said evidence gathered during that operation is now being used to support ongoing criminal investigations and other enforcement action. Like the September action, the earlier inspections were conducted under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

FCA officials have focused their enforcement efforts on businesses conducting crypto activity without the registration required under the existing anti money laundering framework. The regulator has been responsible for supervising relevant UK crypto businesses for compliance with anti money laundering and counter terrorist financing requirements since 2020.

Detective Sergeant Sathish Alalasundaram of the Metropolitan Police Service said investigators face challenges because cryptocurrencies allow funds to move rapidly across jurisdictions.

"Law enforcement and partner agencies are working significantly hard to tackle criminal activity involving digital assets," Alalasundaram said. "The complex nature of cryptocurrency, combined with the speed at which funds can be moved across jurisdictions, presents ongoing challenges for those investigating."

He said the Metropolitan Police continues to adapt its investigative capabilities and disruption methods as criminals change how they use digital assets.

FCA has previously pursued unregistered crypto businesses

The London operations follow several enforcement cases involving crypto businesses operating without FCA registration.

One of the regulator's earlier cases 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 admitted operating crypto ATMs without the required registration, along with offenses involving false documents and criminal property. He was later sentenced to four years in prison, becoming the first person in the UK to receive a criminal sentence for unregistered crypto activity.

Separate enforcement action in June 2024 resulted in two London residents being arrested on suspicion of operating an illegal crypto exchange. Authorities believed more than £1 billion in unregistered cryptoassets had been bought and sold through the business.

The FCA inspected offices connected to the suspects, while Metropolitan Police officers searched two residential properties and seized several digital devices. Both individuals were interviewed under caution and released on bail while the investigation continued.

Enforcement continued in July 2025 when the FCA and Metropolitan Police searched four premises in southwest London. Seven crypto ATMs were seized and two people were arrested on suspicion of money laundering and operating an illegal cryptoasset exchange.

UK cryptoasset businesses providing services covered by the existing Money Laundering Regulations must register with the FCA and comply with applicable financial crime controls. Operating covered services by way of business without the required registration can lead to enforcement action.

UK crypto oversight will expand in October 2027

The Sept. 10 operation comes shortly before the FCA opens applications for the UK's incoming crypto authorization framework.

Under final FCA guidance published on Sept. 16, applications for the new regime will open on Sept. 30, 2026. Firms seeking transitional arrangements must apply by Feb. 28, 2027, before the framework becomes mandatory on Oct. 25, 2027.

The incoming system will expand FCA oversight beyond the anti money laundering and financial promotion requirements that currently apply to much of the sector. Activities covered by the new framework include operating cryptoasset trading platforms, safeguarding cryptoassets, dealing and arranging transactions, issuing qualifying stablecoins and arranging cryptoasset staking.

Existing registration under the Money Laundering Regulations will not automatically convert into authorization under the new system. Companies already registered with the FCA will need to assess their activities and seek the relevant permissions if they intend to continue providing regulated services after the new rules take effect.

The regulator finalized key crypto rules in June covering financial resilience, market integrity, stablecoins and consumer requirements. Firms supporting customers who buy, trade or hold crypto will face standards including capital requirements and stress testing, while market integrity provisions will cover conduct such as insider trading and market manipulation.

Until Oct. 25, 2027, crypto remains largely outside the UK's full financial services regulatory framework apart from areas including anti money laundering requirements and financial promotions. The FCA advises consumers to use its Firm Checker to establish whether a crypto business has the required registration or permissions before dealing with it.