- Two men were arrested during searches in London and near Bradford.
- Basis Markets raised at least $28 million from investors in 2021.
- Investors received essentially worthless NFTs and tokens during fundraising rounds.
British authorities have launched a major criminal investigation into Basis Markets, bringing renewed attention to a failed crypto project that raised millions during the height of the digital-asset boom.
The Serious Fraud Office (SFO) announced on 20 November that it had opened an inquiry into the operation, 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 revived scrutiny follows years of silence and reflects growing concern about unregistered crypto schemes that sprang up during the 2021 boom and later collapsed without clear explanation.
Raids carried out in London and West Yorkshire
SFO investigators, working with local police, executed coordinated searches in London and West Yorkshire earlier in the day.
Two men — one in his 30s and another in his 40s — were detained on suspicion of multiple counts of fraud and money laundering.
The SFO said the arrests represented a significant step in its probe of what it described as a “suspected fraudulent operation” rather than a properly registered business.
According to the agency, Basis Markets raised roughly $28 million (around £21.4 million) through two public fundraising events held in November and December 2021.
Investors purchased non-fungible tokens (NFTs) that were marketed as a way to establish a cryptocurrency hedge fund.
The funds were reportedly intended to support the establishment and operation of that fund.
However, in June 2022 — six months after the capital was raised — investors were reportedly told the project could not continue because of proposed new US regulations.
The SFO investigation is expected to examine the legitimacy of that explanation and determine what ultimately happened to the money collected from investors.
Concerns about investor losses and regulatory explanations
The SFO said it was not yet able to provide further detail about the specific regulatory concerns cited by the project’s operators.
Investigators are probing whether claims about changes in US regulation were used as a pretext to halt operations and whether funds were mishandled or diverted.
The case underscores heightened scrutiny over cryptocurrency fundraising activity, particularly schemes involving NFTs and promises of high-yield investment products such as hedge funds.
Basis Markets’ collapse 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 and assist with the investigation.
The SFO emphasized that tracing the flow of investments will be critical to determining whether fraudulent activity occurred.
SFO expands crypto capabilities amid rising enforcement demands
The launch of this investigation comes as the SFO strengthens its enforcement capabilities for digital assets.
Earlier this year the agency secured over £8 million of additional funding spread over three years to bolster its ability to trace, analyze and recover crypto assets across jurisdictions.
SFO director Nick Ephgrave said the agency is committed to prosecuting those who misuse cryptocurrencies to defraud the public.
“With our growing crypto capabilities and increasing expertise in this area, we are determined to pursue anyone who seeks to use crypto to defraud investors,” he said.
Ephgrave added that Thursday’s action marked an important milestone in the investigation and called on affected investors and potential witnesses to support the inquiry.
As the SFO deepens its digital asset enforcement work, the Basis Markets case could become a key test of how UK fraud authorities handle complex financial misconduct linked to cryptocurrencies in a changing regulatory landscape.