UK Serious Fraud Office arrests two men in $28M Basis Markets crypto investigation. The initial large-scale fraud in cryptocurrency is an indicator of governmental regulation on online activities.
On November 20, the UK Serious Fraud Office announced its investigation into Basis Markets. On X, two male suspects were arrested on suspicion of money laundering and fraud, according to @UKSFO. The SFO confirmed it is still carrying out searches of property in residential areas in London and Yorkshire.
The scheme also brought in about 28 million dollars through two public fundraisers. The first fundraiser organised by Basis Markets took place in November 2021. Investors purchased non-fungible tokens in the project. In December 2021, a second fundraising round came.
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When Promises Collapsed Without Warning
The funds were announced to investors as a crypto hedge fund. The project evolved into a low-risk trade operation. Basis Markets purported to employ algorithmic trading. Buyers of NFTs received entry to profit-sharing groups.
In June 2022, investors were informed that the project was no longer going to be implemented as planned. The organisers referred to the new US regulations. No refunds or explanations were made with the announcement. Most investors doubted that there were actual regulatory issues.
Investigators carried out coordinated raids on November 20. The Metropolitan Police was in favour of the operation. West Yorkshire police were also involved in the searches. Real estate in Herne Hill and around Bradford was targeted.
The two males caught were in their thirties and forties, respectively. The two are suspects of various fraud charges. There are also money laundering charges. The men were released on bail as investigations continued.
Why This Case Is a Shift in History.
It is the first significant cryptocurrency case that has been announced by the SFO. The agency used to deal with big-time financial offences. Local police forces usually handled the cases of crypto fraud. The participation of the SFO is an indication of a strategic change.
The investigation was publicly addressed by the SFO Director Nick Ephgrave QPM. He highlighted the growing cryptocurrency capability of the agency. Ephgrave claimed that the SFO is resolute in an effort to crack down on crypto fraudsters. The director encouraged all people to provide information to aid investigations.
Ellie Reeves MP, the Solicitor General, made a statement about the case. Reeves described fraud as community devastating. She highlighted that the crime is a setback to business confidence. The Solicitor General assured support for SFO cryptocurrency enforcement.
The research shows the darker side of the crypto boom of 2021. The investment programs based on NFT functioned in regulatory grey areas. Most of the projects offered unrealistic returns without accountability. Basis Markets is such an example of exploitation.
The SFO made a direct appeal to investors. Any person in possession of information is to contact [email protected]. The case is being taken with the seriousness of the traditional financial fraud by the officials. The agency is evaluating blockchain sale transactions.