Two people have been arrested on suspicion of running an illegal exchange that allegedly traded more than £1 billion worth of cryptocurrencies.
The Financial Conduct Authority (FCA) searched the London offices of the suspects, aged 38 and 44, while the Metropolitan Police seized digital devices from two residential properties in the capital.
More than £1 billion worth of unrecorded items cryptography It is believed that the assets were bought and sold through the exchange.
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Both suspects were interviewed under caution before being released on bail and the FCA says the investigation into the case was ongoing.
Therese Chambers, executive director of enforcement and market supervision at the FCA, said: “The FCA has an important role to play in keeping dirty money out of the UK financial system.
“These arrests show that we will do everything in our power to stop crypto companies from operating illegally in the UK.”
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The arrests follow a recent global crackdown on crypto companies following the collapse of some of the sector’s biggest companies, leading to millions of people losing money they had invested in cryptocurrencies.
The high-profile implosion of FTX, the crypto exchange run by Sam Bankman-Fried saw the tycoon sentenced to 25 years in prison in the US for defrauding customers and investors.
Sam Bankman-Fried. Photo: Reuters
Meanwhile, Changpeng “CZ” Zhao, the founder of cryptocurrency exchange Binance, was sentenced to four months in prison in April for allowing criminals to launder money on its platform.
Zhao, who resigned from Binance in November, pleaded guilty to violating US money laundering laws.
Binance is still operating and remains the world’s largest cryptocurrency exchange by transaction volume.
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The FCA has a register of so-called authorized crypto firms that are authorized to operate in the UK.
The list currently stands at 45, including cryptocurrency spinoffs created by financial giants such as Fidelity, Standard Chartered and Japanese investment bank Nomura.
But a separate list of crypto firms that the regulator suspects of operating illegally in the UK contains more than 13,000 companies.
The FCA also obliges registered crypto firms to prove they comply with UK money laundering regulations in order to operate legally.
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