FCA Cracks Down on Illegal Cryptocurrency Trading in London

• The FCA clamped down on eight illegal peer-to-peer crypto trading platforms in London.
• FCA confirmed the London clampdown is based on on-site supportive evidence.
• An FCA executive advised crypto users to deal with platforms that are duly registered.

The UK Financial Conduct Authority (FCA) has issued a cease and desist order to eight London addresses suspected of being involved in illegal peer-to-peer crypto trading. In a Wednesday announcement, the regulator stated that it worked with tax officials and the police under money-laundering and terrorist-financing regulations to carry out the operation.

An Evidence-Backed Crackdown

According to the FCA, it obtained evidence supporting a number of ongoing criminal investigations during on-site inspections. The latest effort is in line with the organization’s routine in trying to prevent such traders from providing a route for criminals to move, disguise, and spend money.

The agency further stated that peer-to-peer traders who engage in trading outside centralized exchanges are required to be registered in Britain. However, none of the suspects has such registrations with the FCA.

FCA’s Focused Approach

It is worth noting that authorities in Britain rank crypto assets as high-risk investments, particularly where they are unregulated. Meanwhile, Imogen Makin, counsel at law firm WilmerHale in London, acknowledged the FCA as a working agency that not only makes rules but also follows up on implementation. 

Makin noted that the resources deployed and coordination of operations speak a lot about the FCA’s areas of focus. According to him, it seems likely that the FCA will execute similar crackdowns in the future as the agency remains focused on combatting risks associated with crypto and financial crimes.

Unregistered Trading Platforms Pose a Risk

In the meantime, Steve Smart, executive director of enforcement and market oversight at the FCA, said that unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk. He noted that the agency is focused on using its powers and working with partners to disrupt them. Smart cautioned consumers, advising them to protect themselves by only dealing with firms registered with the FCA, and to remember that crypto remains a high-risk investment. 

In the past, the FCA took action against unregistered crypto practitioners in the UK, including prosecuting an individual operating an illegal network of cryptocurrency ATMs. The agency also partnered with the Metropolitan Police Service in June 2024 to arrest two persons suspected of running an illegal cryptoasset exchange.

Related: FCA Consultation Paper 26/4 Sets Out How Crypto Firms Will Be Governed Under the FCA Handbook