What the FCA operation involved
The action, disclosed by the FCA in a press release, saw officers visit eight premises suspected of facilitating peer-to-peer crypto trades without the required anti-money-laundering registration. At each site the regulator issued cease and desist letters ordering traders to stop illegal activity immediately. Evidence gathered during the on-site inspections is now feeding into a number of ongoing criminal investigations, according to the FCA.
The operation was carried out jointly with HM Revenue & Customs and the South West Regional Organised Crime Unit (SWROCU), reflecting a multi-agency approach that treats unregistered crypto trading as both a regulatory breach and a potential organised-crime concern.
"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."
Those are the words of Steve Smart, the FCA's executive director of enforcement and market oversight, as quoted in the regulator's announcement.
DI Ross Flay of SWROCU framed the action in blunter terms, stating, according to the FCA release, that law enforcement wants to "stop these traders providing a route for criminals to move, disguise and spend illegal money."
Enforcement powers for the operation derive from the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, the same statutory framework that underpins anti-money-laundering obligations across banking and professional services.
Why zero registered P2P platforms matters
Peer-to-peer trading, where individuals buy and sell crypto directly with one another rather than through a centralised exchange, requires appropriate FCA registration. The regulator confirmed a striking fact in its announcement: there are currently no FCA-registered peer-to-peer crypto traders or platforms operating in the UK.
That means every active P2P operator in the country is, by definition, non-compliant. The gap between the scale of activity and the number of authorised participants is total. While precise figures for UK P2P crypto volumes are difficult to pin down, the Government's National Risk Assessment of Money Laundering and Terrorist Financing identifies cryptoassets as an increasingly significant channel for laundering the proceeds of crime, according to the FCA's own reference to the assessment.
The regulatory position is not new. Cryptoassets remain largely unregulated in the UK except for anti-money-laundering requirements and financial promotion rules, as the FCA itself notes. What has changed is the willingness to enforce.
This latest operation sits within a clear escalation pattern. The FCA has previously prosecuted an individual for operating an illegal network of crypto ATMs, according to the regulator. In June 2024, the FCA worked with the Metropolitan Police Service to arrest two individuals suspected of running an unlicensed cryptoasset exchange. The move from individual prosecutions to a coordinated, multi-site, multi-agency raid marks a step change in operational intensity.
Compliance implications for SMEs touching crypto
The immediate targets of the operation were P2P traders themselves. But the compliance ripple extends well beyond that narrow group.
Any UK business that accepts crypto payments, facilitates crypto transactions for customers, or provides professional services to crypto-adjacent firms now operates in a materially sharper enforcement environment. The FCA has signalled it will pursue unregistered operators rather than merely warn them.
For fintech and payments businesses, the risk is direct. A firm that processes or settles transactions originating from an unregistered P2P platform could find itself drawn into money-laundering inquiries, even if it had no knowledge of the counterparty's registration status. Under the 2017 Regulations, obligations to conduct due diligence on counterparties are well established.
For professional services firms, including accountants, solicitors, and tax advisers, the implications are similar. Advising or acting for a client whose crypto activity is unregistered creates exposure. The involvement of HMRC in the London operation underlines that tax compliance sits alongside AML concerns.
The fact that zero P2P platforms hold FCA registration makes the compliance question binary: if a counterparty is operating a P2P crypto business in the UK, it is operating illegally. There is no grey area to navigate.
What operators should do now
The FCA's announcement carries a practical message for businesses in adjacent sectors.
Verify registration status. The FCA maintains a public register, its Firm Checker tool, where any firm's permissions can be checked. For businesses dealing with crypto counterparties, checking that register should be a routine part of onboarding and ongoing due diligence.
Review exposure to P2P flows. Payments firms and banks should assess whether their transaction monitoring is capable of identifying flows linked to P2P crypto trading. The absence of any registered P2P operators means any such flows are, by definition, linked to unregistered activity.
Update risk assessments. The Government's National Risk Assessment already flags cryptoassets as a growing laundering channel. Firms subject to the 2017 Regulations should ensure their own risk assessments reflect the current enforcement posture, not the previous one.
Document decisions. Where a business has considered and declined to engage with crypto-related counterparties, that decision and the reasoning behind it should be recorded. Where engagement continues, the due diligence trail needs to be robust.
The gap between "largely unregulated" and "actively enforced" just narrowed. For SMEs that touch digital assets even tangentially, the FCA's London operation is less a headline about crypto and more a compliance signal that demands a response.
