The UK's Financial Conduct Authority (FCA) has intensified its enforcement efforts against unregistered peer-to-peer (P2P) cryptocurrency service providers. In a coordinated operation with HM Revenue & Customs (HMRC) and the Metropolitan Police, the FCA issued cease-and-desist letters to traders at three London locations, requiring them to stop operating illegal P2P crypto businesses.
The FCA stated that there are currently no FCA-registered P2P crypto businesses operating in the UK. By operating outside the FCA's registration regime, these providers avoid safeguards designed to detect and prevent money laundering.
The UK's cryptocurrency regulatory framework will come into full effect on October 25, 2027. Firms may apply for FCA approval from September 30 through February 28, 2027. The FCA's detailed regulatory guidance, issued earlier this week, clarified how the regulatory perimeter of the incoming cryptoasset regime will apply. This guidance covers activities such as issuing qualifying stablecoins, operating crypto exchanges, dealing and coordinating deals, safeguarding digital assets, and staking. It also outlined the activities that require FCA approval.
Caroline Black, a consultant at Gherson Solicitors LLP, noted that this coordinated enforcement operation confirms the FCA's shift from warnings to active disruption of unregistered P2P crypto businesses, with criminal liability a risk for any operator trading without proper registration.
Aditya Mittal, managing principal at Capco, emphasized that firms should prioritize understanding which parts of their business fall within the scope of the new regulatory framework.
