The Serious Fraud Office has launched a major investigation into an alleged cryptocurrency fraud worth approximately £20 million, resulting in the arrest of two men and raids across England.
Dawn Raids and Arrests
Law enforcement officers raided two properties in West Yorkshire and London as part of the operation. The SFO confirmed that two men, one in his 30s and another in his 40s, were arrested on suspicion of multiple fraud and money-laundering offences connected to the suspected cryptocurrency scheme.
This represents the first significant cryptocurrency case announced by the Serious Fraud Office, marking a substantial escalation in the agency's efforts to combat financial crime in the digital asset space.
The Basis Markets Scheme
The investigation centres around Basis Markets, which the SFO has described as a "suspected fraudulent scheme" rather than a formally registered company. According to investigators, the operation raised millions of pounds through two public fundraising events in November and December 2021.
Investors were reportedly told their money would be used to create a "crypto hedge fund", with the scheme attracting approximately $28 million (£21.4 million) in total investments.
However, six months after the fundraisings in June 2022, investors allegedly received communication stating that proposed new US regulations prevented the project from proceeding as planned. The SFO's investigation is particularly focused on this announcement and the subsequent disappearance of investor funds.
Expanding Crypto Capabilities
Nick Ephgrave, Director of the Serious Fraud Office, emphasised the agency's commitment to tackling cryptocurrency-related crime: "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."
The investigation follows the SFO securing additional funding earlier this year specifically to enhance its cryptocurrency capabilities. In June, the agency announced it had been granted more than £8 million in extra funding over the next three years to strengthen its ability to recover criminal assets, including crypto assets.
The SFO has appealed to the public for any information that could assist their ongoing investigation into Basis Markets and the whereabouts of the missing investor funds.
