The UK FCA, working with tax authorities and police, raids three illegal peer-to-peer crypto businesses, signaling an end to its "light-touch" crypto regulation

Operating a crypto business in the UK now requires registration, with significant penalties for non-compliance.

The UK's Financial Conduct Authority (FCA), in conjunction with HM Revenue & Customs and the Metropolitan Police, has raided three illegal peer-to-peer (P2P) cryptocurrency trading operations in London. The FCA issued cease-and-desist letters to these unregistered businesses, demanding they halt operations. Currently, no P2P crypto businesses are registered with the FCA in the UK, meaning these entities evade anti-money laundering controls. This action signals a more aggressive enforcement stance by the FCA as the country's comprehensive crypto regulatory framework, set to fully take effect on October 25, 2027, approaches. Firms have a window to apply for FCA registration between September 30 and February 28, 2027.

This coordinated enforcement action by the FCA, HMRC, and the police indicates a decisive shift away from the UK's previously "light-touch" approach to crypto regulation. The raids serve as a clear warning to unregistered entities that active disruption, rather than just warnings, is the new norm, with criminal liability being a tangible risk for non-compliant operators. The timing is critical, as it precedes the full implementation of the UK's cryptoasset regime in late 2027 and the opening of the application window for registration in September 2027.

Firms involved in crypto activities, particularly peer-to-peer trading, must urgently assess their compliance with the upcoming regulatory framework. The FCA's guidance clarifies which activities fall within its scope, emphasizing the need for registration for those dealing with stablecoins, exchanges, custody, and more. Failure to obtain proper registration before the deadline, or operating without it, will lead to significant legal and financial repercussions, underscoring the importance of proactive engagement with the new rules.