UK SFO investigates $28 million crypto scheme

According to the SFO, the case began with searches at residential and commercial premises in Herne Hill in south London and at a site near Bradford in West Yorkshire. Officers from the Metropolitan Police and West Yorkshire Police assisted in the operation. Two men in their thirties and forties were arrested during the raids. They are suspected of fraud involving digital assets and money laundering.

The Basis Markets project ran two fundraising rounds at the end of 2021. First, the team raised capital through a non-fungible token (NFT) sale in November, followed by an additional raise in December. Investors were told the money would be used to build a “crypto hedge fund.”

By June 2022, investors were informed that the original plan would not go ahead, allegedly because of expected changes to US crypto regulation. The SFO is now assessing whether those statements were accurate and what actually happened to the funds raised.

The agency notes that this is its first publicly announced large-scale case directly involving cryptocurrencies. SFO Director Nick Ephgrave said the office is expanding its capacity to work with digital assets and intends to stop attempts to use crypto to deceive investors.

Today’s activity is an important step forward in our investigation and we urge anyone with information to come forward and support our work.

Ellie Reeves, the Attorney General’s representative for England and Wales, said fraud undermines trust in business and harms society, and pledged support for the SFO’s efforts.

Investors who believe they may have lost money through Basis Markets are asked to contact the SFO at [email protected] and share any information they have.

The Basis Markets case fits into a broader push by UK law enforcement to take a tougher line on crimes involving digital assets. In early November, a London court sentenced Zhimin Qian (Yadi Zhang) for laundering proceeds from a large-scale investment fraud linked to the record seizure of 61,000 bitcoin in the UK. This and other cases show that UK authorities are steadily building expertise in dealing with cryptocurrencies and major financial scams.