UK signals end of 'light-touch' era with multi-agency raid on peer-to-peer crypto hubs
- Britain’s Financial Conduct Authority, working with tax authorities and the Metropolitan Police, ordered traders at three London locations to stop operating illegal peer-to-peer cryptocurrency businesses.
- The FCA said no peer-to-peer cryptocurrency businesses are registered in Britain, meaning operators outside its regime evade safeguards intended to detect and prevent money laundering.
- Britain’s cryptocurrency framework takes full effect on Oct. 25, 2027, and firms may apply for FCA approval from Sept. 30 through Feb. 28, 2027.
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.