In a landmark move, the UK’s Serious Fraud Office (SFO) has announced it is launching a major criminal investigation into the collapse of what was advertised as a $28 million cryptocurrency hedge fund. The fallen project Basis Markets raised substantial funds from retail investors before abruptly shutting down.
This marks the SFO’s first major foray into crypto related enforcement. The arrests and investigation may signal a turning point for regulatory pressure on crypto investment schemes in the UK.
What Happened: From Promise to Collapse
- What Basis Markets promised: According to SFO disclosures, Basis Markets raised around $28 million in late 2021 through two public fundraisers. The first was a sale of non fungible tokens (NFTs) in November 2021. The second was a token sale in December 2021. The funds were marketed as capital to establish a “crypto hedge fund” presumably to deploy sophisticated arbitrage or yield strategies, and deliver returns to investors
- What went wrong: By June 2022, investors were informed that the project would not proceed allegedly due to potential new U.S. cryptocurrency regulations. Since then, the fund has disappeared with no returns or follow-up
- The suspicion: The SFO now suspects fraud and money laundering. Authorities believe that funds were never deployed as promised, and that the sale of NFTs and tokens was a mechanism to mislead investors and siphon funds
The Investigation: Arrests, Raids, and a Call for Investors’ Help
On 20 November 2025, SFO investigators, aided by the Metropolitan Police and West Yorkshire Police, executed coordinated raids on properties in London (Herne Hill) and near Bradford. Two men one in his 30s, the other in his 40s were arrested on suspicion of fraud by false representation, conspiracy to defraud and money laundering offences.
The SFO has appealed publicly for any investors or individuals with information related to Basis Markets to come forward and contact them. Their goal is to piece together what happened to the funds and who may be involved.
According to the SFO’s director, this marks a serious step in their growing capacity to tackle cryptocurrency linked fraud: “with our expanding cryptocurrency capability … we are determined to pursue anyone who would seek to use cryptocurrency to defraud investors”.
Why It Matters — Bigger Picture for Crypto & Investor Protection
- Regulatory precedent: This is one of the first high profile, large scale crypto fraud investigations by a UK authority. For many investors, it represents a wake up call: crypto isn’t a regulatory no go zone anymore. The SFO a heavyweight in financial crime enforcement stepping in sets a strong precedent
- Risks of unregulated crypto schemes: Basis Markets’ structure using NFTs + tokens, promising hedge fund style returns mirrors a growing number of crypto “investments.” The collapse underlines the risks inherent in unregulated, hype driven projects: often promises of big returns, little transparency, and high risk of complete loss
- Investor vigilance & due diligence: The SFO’s appeal for information highlights that, when things go wrong, law enforcement will rely on whistle blowers, former investors, or anyone with relevant info to reconstruct events. Investors must be cautious, keep records, and vet any crypto fund thoroughly before committing money
- Potential ripple effects across crypto space: If the investigation leads to prosecution or wider asset recovery, other dubious projects might be put under scrutiny pressuring the broader market toward greater transparency and legitimacy
What to Watch Next
- Follow up from SFO courts: Will formal charges be filed, or will the investigation expand beyond the two arrested individuals?
- Recovery of funds or restitution efforts: Might investors recover some or all of their money or property/assets purchased with those funds if wrongdoing is proven?
- Broader regulatory impact: Will other UK regulators or financial crime bodies begin similar crypto related probes? Could this lead to stronger regulation or investor protections in crypto markets?
- Investor reaction: Will this shake confidence among retail investors in crypto or prompt demand for safer, regulated crypto investment vehicles?
Final Thought
The collapse of Basis Markets and the resulting investigation by the SFO serve as a stark reminder of the risks that come with unregulated crypto investment schemes. For investors particularly retail investors lured by promises of high returns or “institutional-grade” crypto hedge funds it underlines the critical importance of due diligence, scepticism and awareness of regulatory/legal risks.
For the UK and potentially the global crypto community this case might mark a turning point: where regulators shift from passive oversight to active enforcement and where investor protection begins to catch up with the pace of innovation.
CONTACT US FOR Digital Risk Management
You can be absolutely sure of a confidential, trustworthy and discreet service at all times, Evidence IT delivers results.
Contact us