The U.K.’s Financial Conduct Authority (FCA) said Thursday that it conducted actions to crack down on three illegal peer-to-peer crypto trading locations in London in a sign the regulator is ramping up enforcement activity as the country's legal framework for crypto comes closer to implementation.
The financial watchdog, which said the crackdown was a joint effort with HM Revenue & Customs (HMRC) and London’s Metropolitan Police, said it issued cease-and-desist letters at the three premises, requiring traders to stop participating in illegal crypto businesses. Peer-to-peer trading occurs when individuals buy and sell crypto directly with each other, an activity that needs to be legally registered in the U.K.
“There are currently no FCA-registered peer-to-peer crypto businesses operating in the U.K.,” the FCA said. “By operating outside the FCA’s registration regime, they avoid controls designed to detect and prevent money laundering,” the agency said.
The action signals that the era of “light-touch” crypto regulation in the U.K. is ending, said Caroline Black, a consultant at Gherson Solicitors LLP.
“This second coordinated enforcement operation in six months confirms the FCA's shift from warnings to active disruption of unregistered P2P crypto businesses, with criminal liability a live risk for any operator trading by way of business without the proper registration,” Black said.
Aditya Mittal, managing principal at Capco, a global management and technology consultancy, said that “following the guidance from the FCA earlier this week, which clarified how the regulatory perimeter of the U.K.’s incoming cryptoasset regime will apply, firms should prioritize understanding which parts of their business fall within scope.”
The guidance covers issuing qualifying stablecoins, operating crypto exchanges, dealing and coordinating deals, safeguarding digital assets and staking. It also set out the activities that need FCA approval. The application window runs from Sept. 30 to Feb. 28, 2027, and the U.K. crypto regulatory framework comes into full force on Oct. 25, 2027.