Two Arrested as UK Investigates Alleged $28M Crypto Scam

The United Kingdom’s Serious Fraud Office has launched its first major investigation into a cryptocurrency-related scheme, targeting Basis Markets, a project that allegedly siphoned roughly $28 million from unsuspecting investors. Authorities revealed that the probe began with coordinated operations across London and West Yorkshire, marking a significant expansion of the SFO’s focus on digital-asset crime.

According to the agency’s announcement, officers carried out early-morning raids at two locations: one in Herne Hill, South London, and the other near Bradford. The searches were conducted alongside the Metropolitan Police and West Yorkshire Police, resulting in the arrest of two men—one in his thirties and the other in his forties—on suspicion of involvement in fraud and money laundering. The operations were described as a key first step in uncovering what investigators believe was a sophisticated scheme masked as a crypto hedge-fund project.

Basis Markets began raising funds in late 2021, promoting itself as an ambitious digital-asset platform that would deploy investor capital into advanced trading strategies. The project pulled in approximately $28 million across two fundraising rounds. The first came through the sale of NFTs in November 2021, followed a month later by another capital raise intended to help establish the hedge fund’s framework. For many investors, the pitch appeared aligned with the enthusiasm surrounding digital assets at the time, as crypto adoption surged globally.

However, by mid-2022, the entire operation came to an abrupt halt. Organisers told investors that looming US regulatory changes made it impossible to continue, but the sudden shutdown, lack of a clear exit plan, and absence of verifiable progress immediately raised red flags. As months passed without transparency, investors increasingly suspected that the project had never operated as advertised.

SFO Director Nick Ephgrave commented that the Basis Markets investigation underscores the agency’s expanding expertise in tracing digital-asset flows and tackling fraud in an evolving financial landscape. He said the SFO remains committed to pursuing those who misuse cryptocurrency to deceive the public and noted that Wednesday’s action marks the beginning of a broader effort to uncover the truth behind Basis Markets’ collapse.

The UK government has also voiced strong support for the probe. Solicitor General Ellie Reeves stressed that fraud involving new financial technologies harms not just individuals but entire communities, undermining trust and economic stability. She reaffirmed the government’s commitment to backing the SFO in its efforts to crack down on crypto-related misconduct and encouraged anyone with relevant information to step forward.

As the investigation progresses, the SFO is actively urging Basis Markets investors to provide details that could help build the case. Authorities say public cooperation will play a crucial role in piecing together how the project operated and in determining whether the millions raised were mismanaged or misappropriated. With digital-asset scams becoming more complex, the case may set a precedent for how UK regulators pursue crypto fraud going forward.