Why Is the FCA Targeting Peer-to-Peer Crypto Trading?
Britain’s Financial Conduct Authority has stepped up its enforcement against unregistered peer-to-peer cryptocurrency businesses, targeting three London premises suspected of operating outside the country’s anti-money laundering rules.
The FCA worked with HM Revenue & Customs and the Metropolitan Police during the September 10 operation. Cease and desist letters were issued at all three premises, requiring operators to stop any suspected illegal crypto business.
The regulator did not identify the businesses or individuals involved. It said unregistered peer-to-peer crypto operators can provide a route for criminals to move or launder illicit funds.
“Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them,” said Steve Smart, executive director of enforcement and market oversight at the FCA.
The action does not mean individuals are prohibited from buying and selling cryptocurrency directly with one another. Personal peer-to-peer transactions do not require FCA registration. The requirement applies when relevant crypto exchange services are being provided by way of business in the UK.
There are currently no peer-to-peer crypto businesses registered with the FCA, making commercially operated P2P services an increasingly visible enforcement target.
Is This the Start of a Broader Enforcement Push?
The latest operation is the FCA’s second London crackdown on peer-to-peer crypto trading this year. In April, the regulator worked with HMRC and the South West Regional Organised Crime Unit to target eight premises suspected of conducting illegal P2P crypto activity.
Cease and desist letters were also issued during that operation. Evidence collected during the inspections is supporting a number of ongoing criminal investigations, according to the regulator.
The repeated raids suggest the FCA is moving beyond warnings and registration guidance toward physical enforcement against businesses it believes are providing crypto exchange services without the required anti-money laundering registration.
The distinction matters for informal crypto dealers that arrange cash-for-crypto transactions, crypto-to-crypto exchanges or similar services. Under current rules, businesses carrying out qualifying cryptoasset exchange activities in the UK must register with the FCA before beginning operations.
Investor Takeaway
The FCA’s latest action is aimed at businesses rather than ordinary individuals making occasional P2P transactions. For crypto operators, however, the enforcement risk is increasing as the regulator targets unregistered services ahead of a much wider UK crypto regime taking effect in 2027.
How Strict Is Britain’s Current Crypto Registration Regime?
The FCA has supervised UK crypto businesses for anti-money laundering purposes since January 2020, and registration has proved difficult for many applicants.
As of September 1, the regulator had received 417 registration applications since taking over supervision. Only 68 had resulted in registration, while 46 were rejected and 263 were withdrawn. The figures cover the wider crypto sector rather than P2P businesses specifically.
Cryptoassets themselves remain only partly covered by Britain’s existing financial regulatory framework. Anti-money laundering requirements apply to qualifying crypto businesses, while separate financial promotion rules govern how cryptoassets can be marketed to UK consumers.
That framework is due to expand substantially. The FCA’s new crypto regulatory regime is scheduled to begin on October 25, 2027, bringing additional crypto activities inside the full financial services perimeter.
What Changes for Crypto Firms in 2027?
The enforcement action comes as the FCA prepares firms for that broader regime. On September 16, one day before announcing the latest P2P crackdown, the regulator published final guidance explaining when cryptoasset activities will require FCA authorisation under the incoming rules.
From October 2027, businesses conducting covered crypto activities in the UK will generally need authorisation unless an exemption or applicable transitional provision applies. That moves the market beyond the current system, where much of the FCA’s direct crypto supervision centers on money laundering controls and financial promotions.
For P2P operators, however, the immediate message is simpler. Businesses do not have until the new regime arrives to address existing registration requirements. Commercial crypto exchange activity already falling within the current money laundering rules requires appropriate registration today.
With three premises targeted in September after eight were visited in April, the FCA is showing that unregistered P2P trading has become an active enforcement priority rather than an issue being left for the 2027 regulatory overhaul.
