• SFO’s inaugural crypto fraud probe targets Basis Markets, marking a significant step in tackling digital asset scams.

• Coordinated raids resulted in the arrest of two men suspected of orchestrating the $28 million scheme.

• Over 500 investors reportedly affected, with the SFO urging victims to provide information to aid the investigation.

Discover the SFO’s Basis Markets fraud investigation details, including arrests and investor appeals. Stay informed on UK crypto regulations to protect your investments—report suspicions today.

What is the Basis Markets Fraud Investigation?

The Basis Markets fraud investigation by the UK’s Serious Fraud Office (SFO) centers on a collapsed cryptocurrency hedge fund project that allegedly defrauded investors of approximately $28 million. Launched in late 2021, the scheme involved NFT sales and fundraising rounds promising high returns, but it abruptly ended in 2022 amid regulatory pressures. This marks the SFO’s first major probe into cryptocurrency-related fraud, emphasizing the agency’s growing focus on digital asset crimes.

How Did the Basis Markets Scheme Operate?

The Basis Markets project began as an ambitious crypto hedge fund initiative, attracting public investment through two key fundraising phases in November and December 2021. The first round involved selling non-fungible tokens (NFTs) to raise initial capital, followed by a secondary effort to bolster funds for what promoters described as a sophisticated trading platform. According to reports from financial watchdogs, these efforts collected around $28 million from hundreds of investors worldwide, many of whom were drawn by promises of secure, high-yield opportunities in the volatile crypto market.

By mid-2022, the project faced insurmountable challenges, including impending U.S. regulatory changes that project leaders cited as reasons for its termination. Investors were left without returns or clear explanations, prompting widespread complaints and regulatory scrutiny. Data from investor forums and preliminary SFO findings indicate that over 500 individuals may have been impacted, with losses varying from thousands to hundreds of thousands per person. Experts in financial crime, such as those from the Financial Conduct Authority (FCA), have noted that such schemes often exploit the anonymity of cryptocurrencies to obscure fund flows.

Nick Ephgrave QPM, Director of the SFO, highlighted the agency’s commitment during the announcement: “With our expanding cryptocurrency capability and growing expertise in this area, we are determined to pursue anyone who would seek to use cryptocurrency to defraud investors.” This investigation builds on the SFO’s track record in complex fraud cases, demonstrating specialized training in blockchain analysis and digital forensics.

Frequently Asked Questions

What triggered the SFO’s Basis Markets investigation?

The investigation was triggered by investor complaints following the project’s collapse in June 2022, amid suspicions of mismanagement and regulatory non-compliance. The SFO’s review of fundraising documents and transaction records revealed patterns consistent with fraud, leading to the coordinated raids and arrests in late 2024.

Who are the suspects arrested in the Basis Markets fraud case?

The two men arrested—one in his thirties from London and another in his forties from West Yorkshire—face suspicions of fraud, money laundering, and conspiracy. Supported by the Metropolitan Police and West Yorkshire Police, the arrests occurred during search warrant executions, with ongoing interrogations to uncover the full scope of the operation.

Key Takeaways

• SFO’s Crypto Focus: This probe underscores the UK’s increasing regulatory scrutiny on cryptocurrency schemes, signaling a proactive stance against digital fraud.
• Investor Impact: The $28 million loss highlights the risks of unregulated crypto investments, with lessons on due diligence for future participants.
• Public Cooperation: Authorities are calling for affected investors to share details, potentially strengthening evidence and accelerating justice.

Conclusion

The SFO’s Basis Markets fraud investigation represents a pivotal moment in the UK’s efforts to combat cryptocurrency scams, integrating advanced digital expertise to hold perpetrators accountable. As the case unfolds, it reinforces the importance of robust investor protections in the evolving crypto landscape. Investors are encouraged to remain vigilant, verify project legitimacy through official channels like the FCA, and report irregularities promptly to safeguard the integrity of digital markets.

Key Highlights

• The SFO announced its first major cryptocurrency fraud investigation into the $28 million Basis Markets scheme.
• The department launched raids in London and West Yorkshire that led to the arrest of two suspected men.
• The SFO has issued an urgent appeal for Basis Markets investors to come forward with information.

The United Kingdom’s Serious Fraud Office (SFO) has officially opened a major investigation into Basis Markets, a purported crypto hedge fund project accused of defrauding investors of approximately $28 million.

As per the official press release, the SFO officers launched its investigation with two coordinated raids in London and West Yorkshire. Investigators, supported by the Metropolitan Police and West Yorkshire Police, executed search warrants at a location in Herne Hill and another near Bradford. The operation resulted in the apprehension of two men, one in his thirties and another in his forties, who were arrested on suspicion of multiple fraud and money laundering offenses.

The beginning of the fraud in 2021

The Basis Markets project raised approximately $28 million from the public through two separate fundraising efforts in late 2021. These funds were to be used to create a “crypto hedge fund.” The first round of funding took place in November 2021, through the sale of non-fungible tokens, or NFTs, and the second fundraiser followed a month later.

However, by June 2022, the project abruptly collapsed. Investors were informed that the continuation of the project was no longer tenable, given the new US regulations that were in the offing. The collapse of this scheme and the lack of clarity thereafter raised suspicions of fraud.

This is the first major cryptocurrency case announced by the SFO. Nick Ephgrave QPM, Director of the SFO, emphasized the agency’s dedication to combating digital asset-related crime, stating, “With our expanding cryptocurrency capability and growing expertise in this area, we are determined to pursue anyone who would seek to use cryptocurrency to defraud investors. Today’s action is an important step in our investigation, and we’re urging anyone with information to come forward and support our enquiries.”

SFO seeks help from affected investors 

Solicitor General Ellie Reeves MP expressed support for the SFO’s efforts, stating, “Fraud is a destructive crime, that harms communities and destroys business confidence. Those committing fraud aren’t just taking away from hard-working members of the public but undermining British values of fairness and playing by the rules.”
She added, “As Solicitor General, I will resolutely support the Serious Fraud Office to tackle the scourge of cryptocurrency fraud and protect consumers. I urge anyone with information to come forward and assist the SFO with their investigations.”

As the SFO investigates the case, law enforcement agencies address the need for public cooperation, especially from investors in Basis Markets, to help secure evidence in pursuit of justice in this matter.