LONDON – November 20, 2025 – The United Kingdom’s Serious Fraud Office (SFO) has launched an investigation into the collapse of a $28 million cryptocurrency scheme, urging affected investors to come forward following the arrest of two men suspected of fraud and money laundering.

This marks the SFO’s first major probe into the cryptocurrency sector, reflecting the growing scrutiny of digital assets and the risks associated with crypto investments. The scheme in question, operated by Basis Markets, raised substantial funds through two public fundraisers in late 2021 by selling non-fungible tokens (NFTs). These funds were then used to establish a crypto hedge fund, according to SFO statements.

“With our expanding cryptocurrency capability and growing expertise in this area, we are determined to pursue anyone who would seek to use cryptocurrency to defraud investors,” said Nick Ephgrave, Director of the SFO.

Timeline and Regulatory Issues

Investors were reportedly informed in June 2022 that the project faced difficulties due to proposed new U.S. regulations affecting the crypto market. The SFO has not disclosed additional details regarding the specific legal or regulatory challenges that may have impacted Basis Markets.

Following two raids in London and West Yorkshire, police and SFO investigators arrested the two suspects earlier on Thursday. Authorities are now working to trace the flow of funds and recover assets for affected investors.

Cryptocurrency Risks and Investor Warnings

This case highlights the increasing vulnerability of investors to crypto scams and fraudulent investment schemes, particularly those involving NFTs and high-risk digital asset hedge funds. Experts warn that many cryptocurrency schemes promise high returns but lack transparency, leaving investors exposed to potential losses.

The SFO encourages anyone who invested in Basis Markets or related entities to contact authorities immediately. Law enforcement agencies across the UK are ramping up efforts to monitor cryptocurrency markets and identify fraudulent schemes, reflecting the sector’s rapid growth and potential for abuse.

Growing SFO Focus on Digital Asset Crimes

The UK’s Serious Fraud Office has been expanding its expertise in cryptocurrency investigations, aiming to hold perpetrators accountable and increase public awareness of digital asset fraud. This growing focus mirrors international concerns as regulators worldwide grapple with emerging risks in decentralized finance, crypto hedge funds, and NFT markets.

Investors are advised to perform thorough due diligence, verify regulatory compliance, and exercise caution before participating in cryptocurrency fundraising events or investment projects.