UK’s Fraud Agency Opens Major Crypto Probe After $28 Million Scheme Collapse
The UK Serious Fraud Office investigates Basis Markets after arrests linked to NFT-based hedge fund collapse
The United Kingdom’s Serious Fraud Office (SFO) has announced its first major investigation into a collapsed cryptocurrency scheme that raised approximately US$28 million and has urged investors to come forward.
Two men were arrested in dawn raids in London and West Yorkshire, as part of the probe into what the agency calls a “suspected fraudulent scheme” known as Basis Markets.
Basis Markets reportedly held two public fundraisers in late 2021, selling non-fungible tokens (NFTs) to raise cash and promising to deploy it into a hedge fund operating in the crypto asset space.
By June 2022, investors were informed that the venture would not proceed, citing proposed new regulation in the United States, the SFO said.
That announcement is central to the agency’s inquiry, which is focused on potential fraud and money-laundering offences.
The raid operations took place earlier on the same day the announcement was made.
The SFO said the two suspects—one male in his thirties, the other in his forties—are under investigation on suspicion of multiple fraud and money-laundering offences.
The agency emphasised that its expanding “cryptocurrency capability” means it will pursue anyone who uses digital-asset technology to defraud investors.
While the SFO did not disclose further details of the case, sources familiar with the investigation say the agency is tracing the flow of funds from the NFT sales and examining the collapse of the promised hedge-fund vehicle.
The scale of the losses—roughly £21 million in sterling—highlights the growing risk posed by digital-asset fund-raising and the attention financial-crime regulators are now giving to such schemes.
This move follows earlier signals of enhanced digital-asset enforcement in the UK, including earlier crypto-asset freezes by the SFO and expanded funding for its crypto-asset investigations.
The Basis Markets case nevertheless represents a landmark moment: the first time the SFO has publicly declared a major cryptocurrency-fraud investigation of this size.
The SFO has appealed directly to potential investors in the scheme to contact its specialist team if they believe they contributed funds.
The case now sets the scene for heightened scrutiny of digital-asset fund-raising and elaborate crypto schemes in the UK, at a time when regulators globally are tightening oversight of the space.
Two men were arrested in dawn raids in London and West Yorkshire, as part of the probe into what the agency calls a “suspected fraudulent scheme” known as Basis Markets.
Basis Markets reportedly held two public fundraisers in late 2021, selling non-fungible tokens (NFTs) to raise cash and promising to deploy it into a hedge fund operating in the crypto asset space.
By June 2022, investors were informed that the venture would not proceed, citing proposed new regulation in the United States, the SFO said.
That announcement is central to the agency’s inquiry, which is focused on potential fraud and money-laundering offences.
The raid operations took place earlier on the same day the announcement was made.
The SFO said the two suspects—one male in his thirties, the other in his forties—are under investigation on suspicion of multiple fraud and money-laundering offences.
The agency emphasised that its expanding “cryptocurrency capability” means it will pursue anyone who uses digital-asset technology to defraud investors.
While the SFO did not disclose further details of the case, sources familiar with the investigation say the agency is tracing the flow of funds from the NFT sales and examining the collapse of the promised hedge-fund vehicle.
The scale of the losses—roughly £21 million in sterling—highlights the growing risk posed by digital-asset fund-raising and the attention financial-crime regulators are now giving to such schemes.
This move follows earlier signals of enhanced digital-asset enforcement in the UK, including earlier crypto-asset freezes by the SFO and expanded funding for its crypto-asset investigations.
The Basis Markets case nevertheless represents a landmark moment: the first time the SFO has publicly declared a major cryptocurrency-fraud investigation of this size.
The SFO has appealed directly to potential investors in the scheme to contact its specialist team if they believe they contributed funds.
The case now sets the scene for heightened scrutiny of digital-asset fund-raising and elaborate crypto schemes in the UK, at a time when regulators globally are tightening oversight of the space.
