FCA cracks down on illegal peer-to-peer crypto trading

Key developments include:

➡️ Coordinated Enforcement Action: The FCA, HMRC and SWROCU targeted 8 premises suspected of illegal peer-to-peer crypto trading;

➡️ Immediate Disruption Measures: The FCA issued cease and desist letters at each site, requiring traders to stop illegal activity immediately;

➡️ Ongoing Criminal Investigations: Evidence gathered during on-site inspections is supporting multiple active criminal investigations;

➡️ Unregistered Activity Prohibited: Peer-to-peer crypto trading requires FCA registration, with no registered traders or platforms currently operating in the UK;

➡️ Financial Crime Risk Exposure: Authorities highlight that unregistered crypto trading provides channels for criminals to move, disguise and spend illicit funds;

➡️ Established Enforcement Track Record: The FCA previously prosecuted illegal crypto ATM networks and supported arrests linked to unregistered crypto exchanges;

➡️ National Risk Alignment: The UK’s National Risk Assessment identifies cryptoassets as an increasing vector for money laundering and terrorist financing ML/TF; and

➡️ Consumer Protection Messaging: The FCA continues to warn consumers to use only FCA-registered firms and recognise the high-risk nature of crypto investments.

✅ Firms should ensure cryptoasset activities are fully registered, strengthen controls over peer-to-peer exposure, and enhance AML frameworks to address crypto-related financial crime risks.