UK Launches First Crackdown on P2P Crypto Traders

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UK authorities have launched their first coordinated crackdown on illegal crypto trading, with the Financial Conduct Authority (FCA) inspecting eight London sites and issuing cease-and-desist orders to unregistered peer-to-peer operators. The action, carried out with HM Revenue & Customs and regional crime units, marks a shift from warnings to on-the-ground enforcement, with evidence now feeding into active criminal investigations.

Authorities move on unregistered traders

According to the FCA’s press release on April 22, the operation was carried out with HM Revenue & Customs (HMRC) and the South West Regional Organised Crime Unit (SWROCU), focusing on suspected peer-to-peer crypto trading activity.

In the UK, individuals or businesses facilitating crypto trades must register with the FCA under anti-money laundering rules. According to the regulator, no peer-to-peer crypto traders or platforms currently meet that requirement, so such operations are automatically illegal.

Officials say these setups create exposure to financial crime, particularly given crypto’s increasing use in moving and disguising illicit funds. In the words of Steve Smart, executive director of enforcement and market oversight at the FCA:

“Unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk. We will use our powers and work with partners to disrupt them. (…) Consumers should protect themselves by only dealing with firms registered with the FCA and by remembering that crypto remains a high risk investment.”

At the same time, Detective Inspector Ross Flay with the SWROCU said:

“By working with our colleagues at the FCA and HMRC we are able to effectively target and disrupt unregistered peer-to-peer crypto traders operating illegally. As law enforcement, we want to stop these traders providing a route for criminals to move, disguise and spend illegal money.”

Enforcement replaces warnings

The action builds on earlier steps by UK regulators, including prosecutions tied to illegal crypto ATM networks and arrests linked to unregistered exchanges.

Authorities are now moving more directly against physical locations and operators rather than relying on guidance and compliance reminders. The crackdown also follows government risk assessments highlighting crypto’s growing role in money laundering and broader financial crime activity.

Meanwhile, the FCA is urging consumers to verify whether a firm’s registration status before engaging, warning that unregulated activity carries both financial and legal risk.

This latest operation suggests enforcement is entering a more active phase. Instead of setting expectations, regulators are now testing them on the ground, with unregistered crypto activity becoming a direct target.