UK regulators target illegal peer-to-peer crypto trading across three London locations

Three London businesses suspected of running illegal peer-to-peer crypto trading operations received cease-and-desist letters on September 10, after a coordinated sweep by the UK’s Financial Conduct Authority, HM Revenue & Customs, and the Metropolitan Police Service.

The operation marks the second joint enforcement action targeting unregistered P2P crypto operations this year. The first, back in April, hit eight separate premises and has since fed into ongoing criminal investigations.

What happened and what it means

The joint task force descended on three undisclosed London locations, delivering formal cease-and-desist orders to the operators. No arrests were made during the operation, and the FCA has declined to publicly name the targeted businesses.

Steve Smart, the FCA’s executive director of enforcement, put it plainly: anyone involved in unregistered P2P crypto operations should expect scrutiny.

The core legal issue is straightforward. Under UK law, any business facilitating peer-to-peer crypto transactions must register with the FCA under anti-money laundering regulations. Those requirements have been in place since early 2020. And here’s the uncomfortable truth for P2P operators: zero P2P crypto businesses are currently registered with the FCA. Not a handful. Not a few stragglers working through paperwork. Zero.

Why P2P crypto trading draws regulatory heat

Without anti-money laundering controls, P2P operations become natural channels for laundering illicit funds and, in the worst cases, financing terrorism. The FCA has been explicit about these risks in its enforcement communications.

The April operation targeting eight premises demonstrated the scale of the problem. Eleven total locations flagged across just two enforcement sweeps in a single year suggests the FCA believes the underground P2P market is substantial enough to warrant dedicated, multi-agency resources.

The bigger regulatory picture

These enforcement actions are happening in what might be called a regulatory interregnum. The UK has had basic crypto registration requirements since 2020, but a comprehensive regulatory framework for the broader digital asset industry isn’t expected to arrive until around 2027.

The fact that regulators are investing coordination resources across three separate agencies—the FCA, HMRC, and the Metropolitan Police—also signals the seriousness of the perceived threat. Tax authorities don’t typically show up to routine compliance checks. Their involvement suggests investigators are looking at the full financial picture behind these operations, including potential tax evasion alongside money laundering concerns.