UK Targets Informal Crypto Markets as FCA Moves Against Unregistered P2P Trading

The Financial Conduct Authority (FCA) has stepped up its supervision of the crypto market by targeting unregistered peer-to-peer (P2P) trading activity, signalling a shift toward tighter oversight of informal digital asset channels operating outside regulated exchanges.

In a coordinated operation across multiple locations in London, the FCA—working alongside HM Revenue & Customs and the South West Regional Organised Crime Unit—visited eight premises suspected of facilitating illegal crypto transactions. Rather than focusing purely on punitive outcomes, the regulator issued cease-and-desist notices and gathered evidence to support ongoing investigations into broader compliance failures.

The move highlights a structural regulatory concern: the rise of off-exchange crypto trading environments that bypass standard anti-money laundering (AML) controls. Unlike centralised platforms, P2P trading allows individuals to transact directly, often reducing transparency and weakening safeguards around identity verification and transaction monitoring.

Notably, the FCA reiterated that no P2P crypto traders or platforms are currently registered in the UK, reinforcing that such activity—if conducted without authorisation—falls outside the legal perimeter. This creates a clear compliance gap, particularly as demand for alternative trading channels grows in parallel with stricter rules on mainstream exchanges.

From a market perspective, the intervention underscores how regulators are expanding focus beyond traditional intermediaries to include decentralised or semi-informal trading models. The concern is not only investor protection, but also the potential use of these channels for illicit financial flows, including money laundering and fraud.

The operation builds on earlier actions targeting unregistered crypto ATMs and illegal exchange networks, suggesting a consistent strategy of addressing access points where regulatory oversight is weakest.

For market participants, the message is direct: regulatory expectations now extend to how crypto is accessed and traded—not just who offers the product.