City watchdog targets London crypto traders in latest clampdown
The City watchdog has targeted three London premises suspected of illegal peer-to-peer crypto trading as it increases its scrutiny of digital assets. In a joint operation with HMRC and the Metropolitan Police, the Financial Conduct Authority (FCA) said on Thursday it had issued three cease-and-desist letters to individuals trading through UK businesses, ordering them to [...]
The Financial Conduct Authority (FCA) has targeted three London premises suspected of engaging in unlawful peer-to-peer cryptocurrency trading. In collaboration with HMRC and the Metropolitan Police, the FCA has issued cease-and-desist letters to individuals operating through UK businesses, demanding an immediate halt to the alleged illegal activities.
Peer-to-peer trading allows individuals to buy and sell cryptocurrency directly, bypassing centralized exchanges. Notably, no peer-to-peer crypto traders in the UK have been registered with the FCA. Authorities warn that unregistered traders are often utilized for money laundering and illicit fund transfers. This latest move follows the FCA's first formal crackdown on eight London premises suspected of peer-to-peer trading in April, evidence from which has aided several criminal investigations.
Steve Smart, FCA’s executive director of enforcement and market oversight, stated that the regulator remains committed to "tracking and disrupting illegal crypto trading." Detective Sergeant Sathish Alalasundaram of the Metropolitan Police Service added that the force is enhancing its investigative capabilities to prosecute those who break the law.
The FCA had previously faced criticism for reversing its four-year ban on investors holding regulated cryptocurrency products last year. However, the new cease-and-desist letters represent a tightening of regulation under "landmark rules" announced in June. From October 2027, firms will require FCA approval to serve British customers, with current registration only necessary for anti-money laundering checks.
Coinbase's UK CEO, Keith Grose, predicted that the new rules will "wipe out" non-compliant firms and boost consumer trust. A YouGov survey commissioned by the FCA in December indicated that 25% of cryptoasset users would be more inclined to invest if the UK had stricter regulations, while approximately 8% of UK adults currently hold cryptocurrency.
The crackdown on illicit crypto finance has also become a priority for the government, with the Home Office announcing an anti-money laundering and asset recovery strategy, including 500 new officers backed by £500 million in investment.
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