British Authorities Investigate Failed Crypto Project Basis Markets
British prosecutors are investigating a failed crypto project called Basis Markets, which raised around $28 million (tens of millions of dollars) from everyday investors before shutting down.
The U.K. Serious Fraud Office (SFO) announced that it has arrested two men suspected of being involved in fraud and money laundering. These arrests are linked to two fundraising events held between November and December 2021. One fundraiser sold NFT memberships, and the other sold tokens. The money collected was supposed to be used to run a crypto hedge fund using arbitrage trading strategies.
During the operation, authorities searched locations in Herne Hill and near Bradford, where they took digital devices and documents as evidence. The suspects' names have not been revealed.
Nick Ephgrave, Director of the SFO, said they are determined to stop people who use cryptocurrency to cheat investors.
The investigation is still ongoing, and authorities are asking the public for any useful information.
Soon after news of the investigation came out, the BASIS token dropped almost 40% in value, ending the day with a 28% loss. In fact, the token has been nearly inactive since April 27, 2022, when $10.8 million worth of it was suddenly sold in one day.
By June 2022, investors were told that the project could not continue due to proposed new U.S. regulations.
Basis Markets had advertised itself as a “yield optimizer” and said it would build a decentralized liquidity pool. Investors were told they would own all the assets and earn low-risk returns by using "basis trading," which is a strategy that takes advantage of price differences in futures markets.
One of the founders, using the name “TraderSkew,” is believed to be Adam Cobb-Webb, a 48-year-old from the UK. In 2023, the U.S. Commodity Futures Trading Commission fined him $150,000 for market manipulation at the same time he was promoting Basis Markets.
Investigations claim that instead of using the funds as promised, the project’s team allegedly sent the money to personal wallets.
