The Serious Fraud Office (SFO) has launched a significant crackdown on alleged cryptocurrency fraud, arresting two men and conducting raids across England as part of a probe into a suspected £20 million investment scheme.
Dawn Raids and Arrests
Law enforcement officers from the SFO executed simultaneous raids at two properties in West Yorkshire and London. During these operations, they arrested two individuals: one man in his 30s and another in his 40s. Both were detained on suspicion of multiple fraud and money-laundering offences.
This investigation represents the first major cryptocurrency case publicly announced by the SFO, 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 sophisticated crypto hedge fund, with the scheme ultimately attracting approximately $28 million (£21.4 million) in total investments.
The Investigation Focus
The SFO's investigation is particularly focused on events that unfolded six months after the fundraisings. In June 2022, investors allegedly received communication stating that proposed new regulations in the United States would prevent the project from proceeding as planned.
Authorities are examining whether this announcement was legitimate and what ultimately happened to the £20 million of investor money. The timing and nature of this communication form a crucial part of the ongoing fraud investigation.
Nick Ephgrave, the SFO's Director, emphasised the agency's commitment to tackling cryptocurrency crime: With our expanding crypto currency capability and growing expertise in this area, we are determined to pursue anyone who would seek to use cryptocurrency to defraud investors.
He added: Today's action is an important step in our investigation, and we're urging anyone with information to come forward and support our inquiries.
Enhanced Crypto Capabilities
The investigation follows the SFO receiving more than £8 million in additional funding earlier this year, specifically allocated to strengthen the agency's ability to investigate cryptocurrency crimes and recover digital assets.
In June, the SFO confirmed this three-year funding package would significantly enhance its ability to recover criminal assets, including crypto assets, wherever they may be, signalling a renewed focus on complex financial crimes involving digital currencies.
The SFO has appealed to the public for any information related to investments in Basis Markets as their investigation continues to develop.
