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.
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