FCA raids eight UK P2P crypto sites; Sun and New York file suits

The UK Financial Conduct Authority, working with HM Revenue & Customs and the South West Regional Organised Crime Unit, on Wednesday inspected eight sites linked to suspected illegal peer-to-peer crypto trading and issued on-site cease-and-desist notices while it collected evidence for criminal investigations.

The FCA said no peer-to-peer crypto traders or platforms are currently registered with the regulator and that operators must register under anti-money laundering rules. The regulator’s statement read: “Unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk.”

Peer-to-peer trading lets individuals buy and sell digital assets directly to one another without using a centralized exchange. Officials described the operation as the FCA’s first targeted action focused on P2P trading and said it follows earlier enforcement against illegal crypto ATM networks and unlicensed exchanges.

In federal court in California, Tron founder Justin Sun filed a lawsuit against World Liberty Financial, alleging the project froze his WLFI tokens and threatened to burn them without justification. Sun wrote on social media that he had attempted to resolve the dispute with the World Liberty team but that his requests to unfreeze the tokens and restore his rights as a token holder were refused. He also raised concerns that 76% of WLFI voting tokens were held in 10 wallets and criticized long lockup periods on the governance token.

New York Attorney General Letitia James filed state-court complaints against Coinbase Financial Markets and Gemini Titan, accusing both operators of running prediction markets without licenses from the New York State Gaming Commission. Her office seeks to recover alleged illegal profits, obtain restitution for consumers, and bar the platforms from offering the markets to people under 21. In a statement, James wrote: “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution.”

Prediction markets allow users to place bets on the outcomes of events such as elections or sports. The New York complaints ask a court to enforce state gaming laws and stop the contested markets from operating in New York until required approvals are obtained.

The three actions were announced this week in separate filings and public statements by the agencies and parties involved. Each filing includes requests for evidence, remedies or prohibitions specific to the alleged violations described in the complaints and regulatory notices.