Skip to content
- Crypto scam Basis Markets is under investigation by U.K. SFO for $28M fraud and money laundering.
- Basis Markets raised $28M from retail investors, offering low-risk returns via arbitrage.
- SFO’s probe signals crackdown on crypto fraud as Basis Markets faces potential “rug pull.”
Crypto scam Basis Markets, a failed hedge fund, is under investigation by the UK Serious Fraud Office (SFO). Authorities accuse the scheme of defrauding retail investors out of $28 million. On November 20 announcement, two men were arrested in London and near Bradford during coordinated raids. The arrests are linked to fraud and money laundering offenses, although the specific roles of the men are not yet revealed.
During the 2021 crypto boom, Basis Markets was operational. The unregistered project was offering low-risk returns due to arbitrage-based trade. It also has an investment of at least $28 million raised by retail investors in two fundraising rounds in late 2021, although not approved by regulators. Investors in turn got worthless tokens and NFTs.
SFO Investigates Basis Markets Shutdown for Possible Rug Pull
In June 2022, the project suddenly terminated its operation, with the reason given as possible new U.S. regulations. However, the SFO suspects that the shutdown may have been a planned drug pull. Investor funds are claimed by the investigators to have been embezzled and taken out of wallets as opposed to being invested.
The SFO has been silent in the investigation since the failure of Basis Markets, which took place over three years ago. The raids this week came as an important move in the probe. Although the names of the men arrested are yet to be announced, the SFO is offering an appeal to investors to provide any information that would help in the investigation.
Also Read: Robinhood Unveils Bold Plan to Make Tokenized Stocks Fully Permissionless
According to a comment made by SFO Director Nick Ephgrave regarding the investigation, he added, “We are resolute in going after anyone who would attempt to defraud investors with the use of cryptocurrency.” He invited anyone with information about the case to come forward. SFO is increasing its cryptocurrency skills to fight the fraud in the digital currency arena.
Crypto Scam Surge Triggers UK Fraud Crackdown
Basis Markets is not the UK’s first crypto fraud case. Zhimin Qian, a Chinese resident, has recently received a prison sentence of more than 11 years in the case of his contribution to a $5.5-billion crypto scam.
Over 128,000 individuals in the global community were victims of the scam. This high-profile case demonstrates that there is an increased worry about cryptocurrency-related fraud in the United Kingdom.
The current SFO investigation in Basis Markets indicates a greater commitment to curb crypto fraud. Fraudulent schemes are on the increase with the emergence of cryptocurrency. The SFO is concentrated on punishing the perpetrators of the same, particularly because crypto frauds are perpetrated against unsuspecting investors.
In the process of the investigation, the authorities of the UK are treating the fraud in the crypto space quite strictly. There will be additional arrests and prosecution as the SFO continues to develop its case. This move highlights the UK interest in regulating the crypto market and securing investors.
Also Read: UXLINK hack update: Hacker launders stolen funds, sells $6.8M ETH
