The UK Financial Conduct Authority has stepped up its campaign against unregistered crypto businesses by targeting three London premises suspected of operating illegal peer-to-peer crypto trading services.
The enforcement action took place on September 10 and involved the FCA, HM Revenue & Customs, and the Metropolitan Police Service.
Cease and desist letters were issued at all three locations, ordering suspected operators to stop any crypto activity being carried out illegally.
FCA targets suspected unregistered P2P crypto businesses
Peer-to-peer crypto trading allows individuals to buy and sell digital assets directly with one another.
Personal transactions do not normally require FCA registration. However, anyone offering peer-to-peer crypto trading as a business in the UK must meet the relevant registration requirements.
At present, no peer-to-peer crypto trading businesses are registered with the FCA.
The regulator says this creates a potential enforcement concern because unregistered operators can avoid the financial crime controls applied to businesses operating within the FCA’s framework.
Those controls are designed to help detect and prevent money laundering and other illicit financial activity.
Steve Smart, the FCA’s executive director of enforcement and market oversight, said the regulator continues to work with law enforcement partners to identify and disrupt illegal crypto businesses.
The warning was clear: firms offering unregistered peer-to-peer crypto services should expect regulatory attention.
September action follows earlier London crackdown
The latest operation builds on enforcement activity carried out earlier in 2026.
In April, the FCA and partner agencies inspected eight London locations suspected of hosting unregistered peer-to-peer crypto businesses.
That operation took place on April 22 with support from HMRC and the South West Regional Organised Crime Unit.
Cease and desist notices were issued at all eight locations.
The FCA also collected evidence during the inspections, which it said is now supporting ongoing criminal investigations and other enforcement action.
Both the April and September operations were carried out under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
The FCA has supervised relevant UK crypto businesses for anti-money laundering and counter-terrorist financing compliance since 2020.
Police highlight challenges in crypto investigations
The Metropolitan Police also acknowledged the difficulties involved in investigating digital asset crime.
Detective Sergeant Sathish Alalasundaram said cryptocurrencies can allow funds to move quickly across different jurisdictions, making investigations more complex.
Law enforcement agencies are therefore continuing to improve their investigative capabilities and disruption methods as criminals change the way they use digital assets.
The cross-border nature of crypto transactions remains one of the biggest challenges for authorities dealing with suspected money laundering and other financial crimes.
FCA has already pursued illegal crypto operators
The regulator’s recent London operations are part of a broader enforcement campaign against businesses operating without the required registration.
One high-profile case involved Olumide Osunkoya, who pleaded guilty in September 2024 to offenses linked to an illegal crypto ATM network.
The network processed around £2.6 million in transactions between December 2021 and September 2023.
Osunkoya admitted operating crypto ATMs without FCA registration, along with offenses involving false documents and criminal property.
He was later sentenced to four years in prison, becoming the first person in the UK to receive a criminal sentence for unregistered crypto activity.
Other London crypto enforcement cases
The FCA has also taken action against suspected illegal crypto exchanges.
In June 2024, two London residents were arrested on suspicion of operating an unregistered crypto exchange.
Authorities believed more than £1 billion in cryptoassets had been bought and sold through the business.
The FCA inspected offices linked to the suspects, while Metropolitan Police officers searched two residential properties and seized several digital devices.
Both individuals were interviewed under caution and later released on bail while the investigation continued.
Enforcement activity continued in July 2025 when the FCA and Metropolitan Police searched four premises in southwest London.
Seven crypto ATMs were seized and two people were arrested on suspicion of money laundering and operating an illegal cryptoasset exchange.
UK crypto firms must register under existing AML rules
Cryptoasset businesses providing services covered by the UK’s Money Laundering Regulations must register with the FCA.
They are also required to follow applicable anti-money laundering and financial crime controls.
Operating covered crypto services as a business without the required registration can lead to enforcement action.
For now, much of the UK crypto sector remains outside the country’s full financial services regulatory framework.
However, anti-money laundering rules and financial promotion requirements already apply to certain crypto activities.
That regulatory structure is set to expand significantly from 2027.
New UK crypto authorization regime starts in 2027
The September enforcement operation comes shortly before the FCA begins accepting applications under the UK’s upcoming crypto authorization framework.
According to final FCA guidance published on September 16, applications will open on September 30, 2026.
Firms seeking transitional arrangements must apply by February 28, 2027.
The new framework becomes mandatory on October 25, 2027.
The regime will expand the FCA’s oversight beyond the anti-money laundering and financial promotion requirements that currently cover much of the industry.
More crypto activities will come under FCA supervision
The new regulatory framework will cover a wider range of crypto services.
These include operating cryptoasset trading platforms, safeguarding digital assets, dealing in and arranging crypto transactions, issuing qualifying stablecoins, and arranging cryptoasset staking.
Companies already registered with the FCA under the Money Laundering Regulations will not automatically receive authorization under the new system.
Existing firms will need to review their activities and apply for the appropriate permissions if they want to continue providing regulated services after October 2027.
FCA finalizes broader crypto rules
The FCA has already finalized several important parts of the incoming regulatory framework.
Rules published in June cover financial resilience, market integrity, stablecoins, and consumer protections.
Crypto businesses serving customers who buy, trade, or hold digital assets will face requirements such as capital standards and stress testing.
Market integrity rules will also address issues including insider trading and market manipulation.
These changes represent a significant expansion of UK crypto regulation compared with the current system.
FCA urges consumers to check crypto firms
Until the new framework becomes fully mandatory in October 2027, UK crypto regulation will remain focused mainly on areas such as anti-money laundering requirements and financial promotions.
The FCA continues to advise consumers to check whether a crypto business is properly registered or authorized before dealing with it.
Its Firm Checker can be used to confirm whether a company holds the required regulatory status.
The regulator’s latest operation in London shows that enforcement against suspected unregistered crypto businesses remains active even before the broader authorization regime comes into force.
