- Two men were arrested during raids in London and near Bradford.
- Basis Markets raised at least $28 million from investors in 2021.
- Investors received NFTs and tokens that later proved to have little or no value during the fundraising rounds.
British authorities have launched a large-scale criminal investigation into Basis Markets, renewing scrutiny of a failed crypto project that attracted millions during the 2021 boom in digital assets.
The Serious Fraud Office (SFO) revealed on 20 November that it has started examining how the project operated, how retail investors were lured with promises of low-risk arbitrage returns, and how at least $28 million vanished following two public fundraising rounds in 2021.
This renewed attention follows years of silence and underscores growing concern about unregistered crypto schemes that proliferated during the 2021 surge in interest, only to collapse without clear explanations.
Raids carried out in London and West Yorkshire
SFO investigators, working with local police, carried out coordinated raids in London and West Yorkshire earlier that day.
Two men — one in his 30s and another in his 40s — were detained on suspicion of multiple offences, including fraud and money laundering.
The SFO said the arrests mark a significant step in its inquiry into the scheme, which it described as a “suspected fraudulent operation” rather than a registered company.
According to the agency, Basis Markets raised approximately $28 million (£21.4 million) through two public fundraising rounds held in November and December 2021.
Investors bought non-fungible tokens (NFTs) that were promoted as a way to create a crypto hedge fund.
The funds were reportedly intended to support the creation and operation of that fund.
However, by June 2022 — six months after the fundraising — investors were told, according to reports, that the project could not continue due to proposed new regulations in the United States.
The SFO investigation is expected to focus on the legitimacy of that explanation and on what ultimately happened to the funds raised from investors.
Concerns over investor losses and regulatory explanations
The SFO said it could not yet provide further details about the nature of the regulatory concerns cited by the project’s operators.
Investigators are examining whether the claim about changing U.S. regulations was used as a pretext to cease operations and whether investor funds were mismanaged or diverted.
This case highlights increased scrutiny of crypto fundraising activities, particularly those involving NFTs and promises of high-yield investment vehicles such as hedge funds.
The collapse of Basis Markets joins a series of high-profile cases in which retail investors suffered losses amid limited transparency and minimal formal oversight.
Authorities have urged anyone who invested in or has information about Basis Markets to come forward to support the investigation.
The SFO emphasized that tracing the flow of investor funds will be essential to determining whether fraudulent activity occurred.
SFO expands crypto capabilities amid growing law enforcement needs
The investigation comes as the SFO works to strengthen its law enforcement capabilities for digital assets.
Earlier this year the agency secured more than £8 million in additional funding over three years to bolster its ability to track, analyse and recover crypto assets across jurisdictions.
SFO Director Nick Ephgrave said the agency is committed to pursuing those who misuse cryptocurrencies to defraud the public.
“With increasing capacity to follow cryptocurrencies and growing expertise in this area, we are determined to pursue anyone who seeks to use crypto to deceive investors,” he said.
Ephgrave added that Thursday’s action represents an important milestone in the inquiry and urged affected investors and potential witnesses to support the investigation.
As the SFO deepens its digital asset enforcement work, the Basis Markets case could become a key test for how UK fraud authorities handle complex crypto-related financial misconduct within a shifting regulatory landscape.