On 22 April 2026, the Financial Conduct Authority led its first multi-agency enforcement operation against illegal peer-to-peer crypto trading in the United Kingdom. Working with HM Revenue and Customs and the South West Regional Organised Crime Unit, the FCA inspected 8 London premises suspected of conducting unregistered crypto asset exchange activity by way of business and served cease and desist letters at each site. Evidence gathered during the visits supports a number of ongoing criminal investigations.
The legal basis for the operation is the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017), as amended to incorporate the FCA's cryptoasset registration regime under Regulation 14A. Any person conducting crypto asset exchange activity by way of business in the UK must be registered with the FCA as a cryptoasset business under Part 2 of the MLRs 2017. The FCA's powers to issue cease and desist notices in respect of unregistered activity derive from Regulation 76 of the MLRs 2017. The FCA confirmed that there are currently no FCA-registered peer-to-peer crypto businesses operating in the UK, meaning all commercial peer-to-peer crypto exchange activity in the UK is operating outside the registration requirement.
Individuals and entities conducting peer-to-peer crypto trading on a commercial basis in the UK face both civil enforcement and criminal liability. Unregistered operation of crypto asset exchange activity by way of business constitutes a criminal offence under Regulation 86 of the MLRs 2017, carrying a maximum custodial sentence of two years' imprisonment. The FCA's choice of a coordinated multi-agency operation rather than civil supervisory action signals that it treats unregistered commercial peer-to-peer activity as a financial crime matter warranting criminal rather than civil response. Crypto exchanges, custodians, wallet providers, and OTC brokers whose clients include informal peer-to-peer traders should review whether their transaction monitoring and client onboarding procedures adequately identify exposure to unregistered commercial flows.
The FCA confirmed that peer-to-peer transactions conducted by individuals on a purely personal, non-commercial basis do not require FCA registration. The boundary between personal and commercial activity depends on the scale, frequency, profit motive, and organisational character of the trading, and the FCA has not published numerical safe harbour thresholds for that distinction. Criminal investigations arising from the April 2026 operation remain ongoing as of the date of publication.
Licentium advises crypto businesses on UK regulatory registration, anti-money laundering compliance, and FCA supervisory engagement, drawing on a partner network of UK financial crime and regulatory counsel for enforcement response matters. Contact us to discuss your registration status under the MLRs 2017, your transaction monitoring programme, or your response strategy if you receive FCA contact. Work we undertake includes MLR 2017 registration assessments, AML compliance programme design, crypto exchange regulatory mapping, and FCA supervisory response advisory.
Source: Financial Conduct Authority, FCA leads first crackdown on illegal crypto trading, 22 April 2026