UK SFO Arrests Two in $28 Million Basis Markets Crypto Fraud Probe
What Prompted the SFO’s First Major Crypto Arrests?
The United Kingdom’s Serious Fraud Office has arrested two men following coordinated raids in Herne Hill, south London, and Bradford, West Yorkshire, in connection with the collapse of Basis Markets — a crypto project that raised 28 million dollars in late 2021 before disappearing with investor funds.
The men, one in his thirties and one in his forties, were arrested on suspicion of fraud and money laundering. The SFO described the case as its first major cryptocurrency investigation, signaling a shift in how the agency approaches large-scale digital-asset fraud.
SFO Director Nick Ephgrave said the arrests reflect the agency’s expanding technical capabilities. “With our expanding cryptocurrency capability and growing expertise in this area, we are determined to pursue anyone who would viewk to use cryptocurrency to defraud investors,” he said.
No charges have been filed yet, and the case remains under investigation. Still, the arrests mark a substantial step in what analysts view as one of the most high-profile alleged to emerge from the 2021 crypto boom.
Investor Takeaway
Why Basis Markets Raised Red Flags ahead
Investigators have highlighted that Basis Markets displayed multiple warning signs from the outset. A group known as Crypto Sleuth Investigations flagged inconsistencies around the team’s identities and exaggerated claims about professional backgrounds. The founders promoted themselves as possessing more than 80 years of combined experience in traditional finance, software development and crypto tooling — claims the sleuths found unverifiable.
Basis Markets positioned itself as a decentralized hedge fund designed to deliver “delta-neutral” yield through arbitrage strategies usually reserved for institutions. To fund the platform, the team launched a membership NFT sale in November 2021, promising holders a share of trading profits. One month later, it launched the BASIS token, promising performance-fee distributions and governance rights.
Together, the NFT and token sales raised a combined 28 million dollars. But investigators found the proceeds were sent directly to founders’ personal wallets rather than to a project treasury, despite promises that tokens would be locked for 12 months. Investors say these transfers breached core representations made in the fundraise.
The project’s pitch materials projected highly unrealistic returns. In one slide, Basis Markets suggested a single NFT costing around 1,880 dollars could eventually earn as much as 18,000 dollars per month. The project later revised that projection to a cumulative 30,000 dollars, but the figures remained implausibly high.
How the Project Collapsed
Despite raising tens of millions, Basis Markets failed to deliver a working product. By mid-2022 — just months later than the fundraising peak — the project abruptly halted operations and stopped communicating with investors. No funds were returned.
Investigators highlighted that during the months leading up to the shutdown, founders showcased luxury watches in the project’s Discord server, raising further questions about the use of investor funds. The sleuths wrote that “there was simply not enough left in the Basis Markets ‘treasury’ to give back to investors, nor even apparently to hire any extra programmers to assist build out the remains of their threadbare roadmap.”
One of the project’s founders, known online as “TraderSkew” and identified as Adam Cobb-Webb, was later sanctioned by the . The CFTC found that Cobb-Webb engaged in multiple instances of spoofing in futures contracts between December 2021 and January 2022. In August 2023, the agency ordered him to pay a 150,000-dollar fine and banned him from for one year.
Investor Takeaway
What Comes Next for the Investigation?
The SFO’s probe remains active. The agency says more evidence collection is underway and has not ruled out additional arrests. Meanwhile, investigators are reviewing financial flows tied to the 2021 NFT and token sales to determine whether investor capital was misappropriated.
If charges are brought, the case could become a landmark in UK crypto enforcement, offering a preview of how regulators intend to treat high-value token sales and decentralized-finance fundraising events going forward.
For investors, the Basis Markets collapse reinforces a structural risk from the 2021 crypto boom: large sums flowed into opaque teams offering with little accountability. Regulators are now moving aggressively to police those legacy schemes, and more cases may follow.
