PolicyUK's Regulatory Crackdown on Peer-to-Peer Crypto Trading

Heightened enforcement comes as regulatory guidance is released for crypto firms ahead of the full framework launching in late 2027.

By Olivier Acuna|Edited by Sheldon Reback52 min ago2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on The U.K.'s financial authority is intensifying its enforcement efforts against unregistered crypto service providers. (FCA/Media)SummaryShow
  • The Financial Conduct Authority (FCA) of the UK, in collaboration with tax authorities and the Metropolitan Police, has ordered traders at three London sites to cease their illegal peer-to-peer cryptocurrency operations.
  • The FCA noted that there are currently no registered peer-to-peer cryptocurrency businesses in the UK, allowing operators to bypass regulations intended to combat money laundering.
  • The full UK cryptocurrency regulatory framework will become effective on October 25, 2027, with firms eligible to seek FCA approval from September 30 through February 28, 2027.

On Thursday, the UK’s Financial Conduct Authority (FCA) announced a crackdown on three illegal peer-to-peer crypto trading sites in London, marking a significant shift in enforcement as the country’s legal framework for cryptocurrency approaches its implementation date.

This enforcement action, which the FCA coordinated with HM Revenue & Customs (HMRC) and the Metropolitan Police, involved issuing cease-and-desist orders to traders at the three locations, mandating them to halt their illegal activities. Peer-to-peer trading, which enables individuals to buy and sell cryptocurrencies directly, requires legal registration in the UK.

The FCA stated, “There are currently no FCA-registered peer-to-peer crypto businesses operating in the UK.” It emphasized that these businesses, by operating outside the FCA’s regulatory framework, evade critical controls aimed at preventing money laundering.

This move indicates the conclusion of the UK’s “light-touch” regulation era, according to Caroline Black, a consultant at Gherson Solicitors LLP. She remarked, “This second coordinated enforcement operation in six months confirms the FCA's transition from issuing warnings to actively disrupting unregistered P2P crypto businesses, with criminal liability now being a genuine risk for any operator trading without the necessary registration.”

Aditya Mittal, managing principal at Capco, a global management and technology consultancy, commented that “following the FCA's guidance released earlier this week, which clarified the regulatory boundaries of the UK’s forthcoming cryptoasset regime, firms should focus on identifying which elements of their operations fall within this scope.”

This guidance includes regulations around issuing qualifying stablecoins, operating crypto exchanges, facilitating transactions, safeguarding digital assets, and staking activities. The application period for FCA approval runs from September 30 to February 28, 2027, with the full regulatory framework set to take effect on October 25, 2027.

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