UK SFO Launches First Large-Scale Prosecution of Crypto Assets Fraud Case: Basis Markets NFT Fundraising Controversy

Source: Yellow Original Title: The First Major Crypto Case in Great Britain Targets the NFT Fundraising of Basis Markets

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The UK Strengthens Crackdown on Cryptocurrency Fraud

The UK's Serious Fraud Office (SFO) arrested two men in London and Bradford on November 20, marking the agency's first significant criminal enforcement action in a cryptocurrency fraud case. The two suspects face charges related to Basis Markets, which raised $28 million through two NFT fundraising events at the end of 2021, only to collapse the following year.

Arrest Operation Details

The SFO coordinated a raid with the Metropolitan Police and West Yorkshire Police, arresting a man in his thirties (in Herne Hill, London) and a man in his forties (near Bradford). The raid targeted fraud and money laundering charges.

Basis Markets raised $28 million through NFT issuance in November and December 2021, and then suddenly suspended operations in June 2022, claiming that U.S. regulatory proposals were the reason for the shutdown.

These arrests represent a significant expansion of the UK's law enforcement capabilities against digital asset crime. In the “Economic Crime Strategy” launched by the Crown Prosecution Service in 2025, authorities are establishing dedicated resources and frameworks for the recovery of crypto assets.

SFO's action against digital asset fraud

SFO Director Nick Ephgrave confirmed that the agency has developed specialized capabilities to investigate digital asset schemes. The establishment of this unit reflects growing concerns about investor losses in cryptocurrency companies that lack regulatory oversight.

Chief Prosecutor Ellie Reeves stated that cryptocurrency fraud schemes pose a serious threat to the UK economy. She emphasized that such activities undermine confidence in financial markets. The government has pledged to continue supporting law enforcement actions against fraud involving digital assets.

The SFO has issued a public appeal to victims and whistleblowers, indicating that authorities believe there are more victims beyond those already reported. This case could set a legal precedent for how UK courts handle blockchain-based fraud litigation.

Fundraising and Collapse of Basis Markets

The project launched two NFT fundraising activities during the digital collectibles sales boom at the end of 2021. The first issuance in November 2021 promised investors the opportunity to participate in a new type of crypto investment tool through NFT purchases. The second event took place in December 2021, where the organizers promised to create a crypto hedge fund using advanced trading strategies.

During this period, investor enthusiasm was high, and NFT sales peaked in the market.

However, the project suspended operations in June 2022, with the organizers citing U.S. regulatory proposals as the reason for the closure. This timing coincided with a broader review by U.S. agencies of NFT and crypto fundraising practices. However, the $28 million raised remained inaccessible to investors after the collapse.

The project's failure coincided with the significant decline of the cryptocurrency market in 2022, raising questions about whether regulatory changes could fully explain the reasons for the pause.

NFT-based fundraising became popular in 2021, with projects leveraging digital collectibles to attract capital. An investigation by the U.S. Department of the Treasury found that approximately 65% of NFT fraud cases involved deceptive marketing. This high rate highlights the challenges faced by regulatory and law enforcement agencies in pursuing such cases.

UK Expands Crypto Crime Enforcement Framework

This survey follows the “2025 Economic Crime Strategy” launched by the UK’s Crown Prosecution Service in May, which identifies cryptocurrency and online fraud as priority threats. The strategy calls for enhanced coordination between the prosecution service, SFO, and law enforcement agencies. Authorities have appointed operational leaders specifically responsible for the recovery of crypto assets and established a new cooperation framework.

These institutional changes indicate that authorities recognize the inadequacy of traditional investigative tools for blockchain-based financial crimes. The SFO's decision to prosecute crypto-related cases aligns with the global trend of stricter enforcement against digital asset fraud.

Regulators around the world are examining fundraising methods that blur the lines between securities, collectibles, and investments. The allegations against Basis Markets may influence how UK courts interpret and apply fraud regulations to cryptocurrency schemes.

The case indicates that authorities are still willing to pursue complex digital asset fraud despite facing technical and legal challenges. Regulatory uncertainty will not protect defendants from prosecution, law enforcement officials stated.

The judgment outcome may determine the level of proactive investigation by the UK in cases of cryptocurrency crime. As the digital asset market evolves, this investigation could define law enforcement priorities and legal interpretations in the coming years.

Summary

The Basis Markets case represents a pivotal moment in UK crypto enforcement. The SFO's allocation of resources to this investigation indicates that authorities view digital asset fraud as a serious economic threat that requires specialized prosecutorial capabilities. The court's ruling on the charges may set an important precedent for future cases involving NFT and cryptocurrency fundraising schemes.