UK FCA Orders Three London P2P Crypto Premises to Stop Operating Over Suspected Lack of Registration

On September 17 local time, the UK's Financial Conduct Authority (FCA) announced that it had issued cease-and-desist letters to three London premises suspected of operating unregistered peer-to-peer (P2P) crypto businesses. The action took place on September 10 with tax authority HMRC and the Metropolitan Police Service. P2P trading is a way for individuals to buy and sell crypto assets directly with one another. According to the FCA, individuals trading on their own behalf do not need to register, but those providing the service as a business in the UK must register under anti-money-laundering rules. The FCA said no P2P crypto business currently operating in the UK is registered.

The authorities carried out the action under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. The FCA said unregistered P2P businesses could be used to move illicit funds while avoiding controls intended to detect and prevent money laundering. The action followed the FCA's first joint operation in April, when it targeted eight premises with HMRC and the South West Regional Organised Crime Unit. The FCA said evidence collected then is being used for criminal investigations and other enforcement action. It did not disclose any arrests or charges linked to the September operation or name the three premises.

Metanomia View

Exchanging crypto assets directly without a centralized exchange does not remove the UK's anti-money-laundering registration duty when the activity is offered as a business. Given the FCA's distinction that individuals trading on their own behalf need no registration, the target of this action is not P2P trading itself but premises suspected of offering it commercially without registration. The operation shows that the regulatory boundary turns on the nature of the business, not simply on the trading method.

Sources