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The UK Serious Fraud Office arrested two men on Thursday in its first major enforcement action targeting cryptocurrency fraud, raiding properties in south London and West Yorkshire as part of a $28 million investigation into the collapsed Basis Markets platform.
The suspects, aged in their 30s and 40s, were detained on suspicion of fraud and money laundering in connection with the 2021 project, which promised investors institutional-grade trading strategies before abruptly failing.
The arrests, made during coordinated raids in Herne Hill, south London, and Bradford, West Yorkshire, mark the agency’s first large-scale dive into digital asset fraud. For crypto investors watching how regulators respond to failures across the sector, the development signals a significant expansion of enforcement capabilities.
According to the SFO, the two suspects—one in his 40s and the other in his 30s—were arrested on suspicion of fraud and money laundering. No charges have yet been filed, but the case remains active.
The agency describes the Basis Markets downfall as one of the most high-profile alleged rug pulls to emerge from the 2021 crypto boom, a period that set the stage for multiple investigations tied to crypto fund collapse scenarios worldwide.
SFO Director Nick Ephgrave emphasized the agency’s evolving approach toward crypto-related wrongdoing. “The two arrests reflect the agency’s expanding technical capabilities,” he said, noting that the SFO is determined to pursue actors who attempt to use crypto to defraud investors.
His comments underscore the regulator’s recognition that every major crypto fund collapse fuels wider concerns across markets and government bodies.
Before the SFO formally opened its probe, independent researchers had already flagged Basis Markets for a range of inconsistencies.
A group known as Crypto Sleuth Investigations uncovered discrepancies in the public identities of the project’s founders and questioned claims about their professional expertise.
Their findings became early evidence in what investigators now describe as a textbook crypto fund collapse pattern—rapid fundraising, sweeping promises, and opaque team backgrounds.
Basis Markets promoted itself as a decentralized hedge fund offering delta-neutral strategies typically reserved for institutional investors. The founders claimed to possess more than 80 years of combined experience in finance, software development, and crypto tooling. However, sleuths reported that these assertions could not be verified.
To finance the platform, the team launched membership NFTs in November 2021, promising holders a share of trading profits. One month later, they released the BASIS token, marketed with additional benefits such as performance fee distributions and governance rights.
It was a model that, in hindsight, mirrored many of the elements found in other high-profile crypto fund collapse events from that era.
Investigators were particularly struck by projections included in Basis Markets’ pitch materials. In one document, the team suggested that a single NFT priced at $1,880 could ultimately generate up to $18,000 per month.
The projection was later revised to a cumulative $30,000—still far beyond realistic performance expectations. These claims, sleuths argued, reflected structural issues that commonly precede a crypto fund collapse.
One of the founders of Basis Markets, Adam Cobb-Webb—also known as “TraderSkew”—faced separate regulatory action in the United States. The U.S. Commodity Futures Trading Commission sanctioned him for spoofing in West Texas International crude oil futures contracts between December 2021 and January 2022.
In August 2023, he was fined $150,000 and barred from trading on any CFTC-regulated platform for one year. This enforcement action became another thread in the broader narrative surrounding the crypto fund collapse investigation.
For regulators, Cobb-Webb’s disciplinary record reinforces the need for stronger due diligence in digital asset fundraising. Many projects that rose to prominence in 2021 promised sophisticated financial strategies while providing minimal transparency or accountability—conditions that later fueled a wave of crypto fund collapse incidents across the industry.
The SFO says its investigation remains ongoing, with more evidence still being collected. Financial flows from the 2021 NFT and token sales are now under review to determine whether investor capital was diverted. The agency has not ruled out additional arrests.
For policymakers and crypto investors alike, the Basis Markets case is emerging as a potentially defining moment. If charges are eventually filed, the proceedings could become a landmark in UK crypto enforcement and shape how regulators treat high-value token sales and decentralized fundraising events.
As more jurisdictions confront the aftermath of the 2021 boom, every major crypto fund collapse adds new pressure to strengthen oversight, improve transparency, and close regulatory gaps.
In the broader landscape, the SFO’s probe illustrates a growing recognition: unchecked hype, unverifiable credentials, and unrealistic returns form a familiar blueprint for a crypto fund collapse. With legacy schemes still under scrutiny, further actions from global regulators are likely.
