FCA Targets Illegal London Crypto Traders in Major Multi-Agency Crackdown

The Financial Conduct Authority (FCA) has intensified its crackdown on illegal peer-to-peer crypto trading, raiding three London locations alongside the Metropolitan Police and HMRC. For fintech professionals, this signal is clear: the UK regulator is aggressively closing the net on unregistered digital asset businesses that bypass anti-money laundering controls, leaving no room for non-compliant commercial operations.

What was announced

The FCA, in a coordinated effort with HM Revenue & Customs (HMRC) and the Metropolitan Police Service, targeted three specific premises across London suspected of hosting illegal peer-to-peer (P2P) crypto trading activities. During the operation, officials issued cease and desist letters to the traders involved, requiring an immediate halt to any suspected illegal crypto business operations. Peer-to-peer trading occurs when individuals buy and sell cryptoassets directly with one another, but the FCA mandates that anyone conducting this activity "by way of business" in the UK must be appropriately registered.

A critical takeaway for the industry is the regulator's confirmation that there are currently no FCA-registered peer-to-peer crypto businesses operating in the UK. Consequently, any such commercial activity is currently operating outside the law. Unregistered traders are viewed as a significant risk because they avoid the controls designed to detect and prevent money laundering, potentially providing a route for criminals to move illicit funds. This latest intervention follows a similar crackdown in April, with evidence from that operation currently supporting ongoing criminal investigations. The FCA’s recent enforcement track record also includes the successful prosecution of Olumide Osunkoya for operating an unlawful crypto ATM network and the arrest of two individuals suspected of running an illegal crypto exchange.

"Working with partners, we continue to track and disrupt illegal crypto activity. Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them."

Steve Smart, executive director of enforcement and market oversight at the FCA.

The companies involved

The Financial Conduct Authority (FCA) is the primary conduct regulator for financial services firms and financial markets in the UK, maintaining a public website at fca.org.uk. Its role has expanded to include the strict supervision of cryptoasset businesses to ensure compliance with anti-money laundering regulations. The Metropolitan Police Service, accessible at met.police.uk, is the territorial police force responsible for law enforcement in Greater London. Detective Sergeant Sathish Alalasundaram at the Metropolitan Police Service noted that the force is continually adapting its investigative capabilities to tackle the complex nature of digital assets and the speed of cross-jurisdictional fund movements. HM Revenue & Customs (HMRC), which operates via gov.uk, joined the operation as the UK’s tax and customs authority. These agencies form a multi-partner front designed to protect consumers and maintain the integrity of the UK financial system by disrupting those who operate outside the established registration regime.

What FF News has reported before

FF News has previously tracked the regulator’s efforts to provide consumers and firms with the tools necessary to navigate the legal digital asset landscape. We reported when the FCA Launches Firm Checker to Fight Financial Crime, an initiative aimed at helping the public identify which crypto firms are correctly registered. Additionally, our coverage of FCA Transaction Reporting Proposals to Save Firms £100 Million a Year highlighted the regulator's attempt to balance rigorous oversight with operational efficiency for compliant businesses. These reports reflect a consistent regulatory trajectory: the FCA is committed to streamlining the path for registered entities while simultaneously increasing the physical and legal pressure on those attempting to operate in the shadows of the P2P market.

What this means

This operation marks a transition from regulatory warning to physical disruption, signaling that the "grey market" for P2P crypto trading in London is being systematically dismantled. By confirming that zero P2P firms are currently registered, the FCA has effectively placed the entire sub-sector on notice. This moves the needle for the broader fintech industry by reinforcing that "decentralized" or "direct" trading models are not exempt from the same AML rigour applied to major exchanges. The primary question for the sector is whether these enforcement actions will successfully migrate traders toward registered platforms or simply drive illicit activity into more opaque, cross-border channels that remain beyond the reach of local premises raids.