UK Regulator Cracks Down on Illegal Crypto Trading as New Rules Approach

Britain’s Financial Conduct Authority has intensified its crackdown on illegal cryptocurrency trading, taking action against three peer-to-peer trading locations in London. Working with HM Revenue & Customs and the Metropolitan Police, the regulator issued cease and desist orders requiring traders to stop operations immediately.

Why This Matters

Peer-to-peer trading lets individuals buy and sell crypto directly, but such businesses must be registered under UK law. The FCA confirmed no peer-to-peer crypto firms are currently registered, meaning these operations bypassed safeguards designed to prevent money laundering.

A Shift in Regulatory Approach

Legal experts say this marks the end of the UK’s relaxed stance on crypto oversight. This second major enforcement action in six months shows authorities moving from warnings to direct disruption, with criminal liability now a real risk for unregistered operators.

New Rules Coming by Late 2027

The action follows fresh guidance clarifying which activities, including stablecoin issuance, exchange operations, custody, and staking, will fall under FCA oversight. Firms can apply for approval between September 30 and February 28, 2027, with the full framework taking effect October 25, 2027.