Have you consulted with a lawyer specialising in English financial services regulations? It seems pretty clear that you're performing activities that require you to be authorised by the Financial Conduct Authority[1]. Have you spoken to them? The fact you're lending and borrowing BTC rather than GBP makes no difference to the requirements. Bitcoin isn't magic no-rules money. You're risking prison and large fines.
[1] http://www.fca.org.uk/firms/about-authorisation/do-i-need-to...