Key Highlights
- The Financial Conduct Authority (FCA), HM Revenue & Customs (HMRC), and the Metropolitan Police conducted a joint enforcement action against three peer-to-peer (P2P) cryptocurrency trading locations in London, issuing cease-and-desist letters.
- No P2P crypto trading businesses are currently registered with the FCA in the UK, meaning any operator conducting P2P trading by way of business is doing so illegally and outside anti-money laundering safeguards.
- The operation marks an escalation in the UK’s regulatory stance, following the FCA’s action six months ago against HTX (formerly Huobi), where major app stores were asked to restrict access for UK consumers.
FCA Leads Coordinated Raids on Unregistered London Crypto Venues
The Financial Conduct Authority has significantly escalated its enforcement posture toward cryptocurrency businesses operating outside the regulatory perimeter. In a coordinated operation with HM Revenue & Customs and the Metropolitan Police Service, the FCA targeted three physical peer-to-peer crypto trading locations in London, handing operators formal cease-and-desist letters. The action signals a decisive shift from warnings to active disruption of unregistered venues that facilitate direct crypto transactions between individuals on a commercial basis.
Under the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, any entity conducting P2P crypto trading by way of business must register with the FCA. Personal, non-commercial transactions between individuals do not require registration. However, the regulator confirmed that as of the enforcement date, there are zero registered P2P crypto businesses operating in the United Kingdom. This regulatory vacuum means every commercial P2P venue currently operating is doing so without the mandatory oversight designed to detect and prevent money laundering.
Regulators Warn of Unrelenting Scrutiny for Non-Compliant Operators
The FCA’s executive director of enforcement and market oversight, Steve Smart, issued a direct warning to the sector:
Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them.
The Metropolitan Police underscored the law enforcement rationale behind the crackdown. Sathish Alalasundaram of the Metropolitan Police Service stated:
As criminals continue to adapt their methods, the Met Police continues to evolve and adapt our investigative capabilities…
The joint operation reflects growing concern that unregistered P2P venues serve as critical infrastructure for illicit finance, enabling the conversion of criminal proceeds into cryptocurrency without the transaction monitoring, customer due diligence, and suspicious activity reporting obligations that registered firms must follow.
Escalation Follows HTX App Store Restrictions
The London raids represent the next phase in a hardening regulatory trajectory that began approximately six months ago. In that earlier action, the FCA moved against HTX (formerly known as Huobi), resulting in major mobile app stores being asked to restrict access for UK consumers. That case established a precedent for using distribution channels—app stores—as enforcement levers against non-compliant crypto firms. The current operation extends that logic to physical trading venues, demonstrating a multi-vector approach that targets both digital and brick-and-mortar touchpoints.
The message from regulators is consistent: the era of regulatory forbearance for crypto businesses operating without registration has ended. The focus has evolved from offshore exchanges to domestic P2P operators, but the core requirement remains unchanged—any firm conducting cryptoasset activity by way of business in the UK must be registered and supervised.
Why This Matters
The UK’s approach to crypto regulation has historically been characterized by a registration regime rather than a licensing framework, placing the onus on firms to demonstrate compliance with anti-money laundering (AML) standards before operating. The absence of any registered P2P operators highlights a systemic compliance gap: either the business model is incompatible with current AML requirements, or operators have chosen to remain outside the regulatory perimeter. The FCA’s willingness to deploy law enforcement partnerships and physical enforcement actions suggests a strategic pivot toward disruption as a deterrent. For the industry, the implications are clear—regulatory tolerance for “wait-and-see” approaches has evaporated. For consumers, the action removes venues that offered no statutory protections, no access to the Financial Ombudsman Service, and no Financial Services Compensation Scheme coverage. The next steps will likely include further site actions, potential criminal referrals for persistent offenders, and continued pressure on ancillary service providers—such as payment processors and landlords—to avoid facilitating unregistered activity.
Frequently Asked Questions
What is peer-to-peer crypto trading and when does it require FCA registration?
Peer-to-peer crypto trading involves individuals buying and selling cryptocurrency directly with each other, often facilitated by a platform or physical venue. In the UK, registration with the FCA is mandatory only when P2P trading is conducted “by way of business”—meaning on a commercial, habitual, or professional basis. Personal, non-commercial transactions between individuals do not require registration.
Are there any legally operating P2P crypto businesses in the UK currently?
No. The FCA has confirmed that as of the enforcement action, there are zero registered P2P crypto businesses operating in the United Kingdom. Any commercial P2P venue currently operating is doing so without the required registration and outside the regulatory safeguards designed to prevent money laundering.
What happens to businesses that ignore the cease-and-desist letters?
While the source does not specify next steps for non-compliance, the involvement of the Metropolitan Police and HMRC indicates that continued operation could lead to criminal investigation, asset seizure, prosecution under the Money Laundering Regulations, and potential court orders to shut down premises. The FCA has signaled that enforcement will be persistent and multi-agency.
