- Two men were arrested during raids in London and near Bradford.
- Basis Markets raised at least $28 million from investors in 2021.
- Investors received effectively worthless NFTs and tokens during fundraising rounds.
British authorities have launched a major criminal investigation into Basis Markets, renewing scrutiny of a failed crypto project that raised millions at the height of the digital asset boom.
The Serious Fraud Office (SFO) announced on 20 November that it has opened an inquiry into how the project operated, how retail investors were attracted with promises of low-risk arbitrage returns, and how at least $28 million disappeared after two fundraising rounds in 2021.
The renewed review follows years of relative silence and reflects growing concern about unregistered crypto schemes that proliferated during the 2021 boom before clear explanations emerged.
Raids carried out in London and West Yorkshire
SFO investigators, working with local police, carried out coordinated raids in London and West Yorkshire earlier in the day.
Two men — one aged in his 30s and the other in his 40s — were detained on suspicion of multiple fraud offences and money laundering.
The SFO said the arrests represent a significant development in its probe of a scheme it described as a “suspicious fraudulent operation” rather than a registered firm.
According to the agency, Basis Markets raised roughly $28 million (about £21.4 million) through two public fundraisings in November and December 2021.
Investors purchased non-fungible tokens (NFTs) that were promoted as a way to build a crypto hedge fund.
The funds were reportedly intended to support the creation and operation of that fund.
However, in June 2022 — six months after the capital was raised — investors were reportedly told the project could no longer continue because of proposed new US regulations.
The SFO is expected to examine the legitimacy of that explanation and to investigate what ultimately happened to the money raised from investors.
Concerns over investor losses and regulatory explanations
The SFO said it is not yet able to provide further detail on the nature of the regulatory concerns cited by the project’s operators.
Investigators are looking into whether claims about changing US regulation were used as a pretext to cease operations and whether funds were mismanaged or diverted.
The case highlights growing scrutiny of crypto fundraising activities, particularly those involving NFTs and promises of high-return investment products such as hedge funds.
The collapse of Basis Markets adds to a string of high-profile cases in which retail investors have suffered losses amid limited transparency and minimal formal oversight.
Authorities have urged anyone who invested in Basis Markets or who has information about the project to come forward to assist the investigation.
The SFO emphasized that tracing the flow of investment funds will be crucial to determining whether fraudulent activity took place.
SFO expands crypto capacity amid rising enforcement demand
The launch of this investigation comes as the SFO strengthens its capabilities for enforcing laws involving digital assets.
Earlier this year the agency secured more than £8 million in additional funding over three years to boost its ability to track, analyse and recover crypto assets across jurisdictions.
SFO director Nick Ephgrave said the agency is committed to pursuing those who exploit cryptocurrencies to defraud the public.
“With our growing crypto capabilities and expertise in this area, we are determined to act against anyone who seeks to use crypto to commit fraud against investors,” he said.
Ephgrave added that Thursday’s action represented an important milestone in the investigation and called on affected investors and potential witnesses to support the inquiry.
As the SFO deepens its enforcement activity in the digital asset space, the Basis Markets case could become a key test of how UK fraud authorities address complex financial wrongdoing linked to cryptocurrencies in a shifting regulatory environment.