The UK’s Serious Fraud Office (SFO) has arrested two people in connection with a $28 million Basis Market collapse probe. The SFO described the case as its first major crypto investigation, signaling a shift in the agency’s approach to large-scale crypto fraud. The SFO said the two were arrested following coordinated raids in Herne Hill, south London, and Bradford, West Yorkshire. The men, one in his 40s and the other in his 30s, were arrested on suspicion of fraud and money laundering. SFO Director Nick Ephgrave said the two arrests reflect the agency’s expanding technical capabilities. He emphasized the agency’s growing expertise in the crypto space, stating that the SFO is determined to pursue anyone who seeks to use crypto to defraud investors. Meanwhile, no charges have been filed against the arrested suspects, but the case remains under investigation. However, the arrest still marks a huge step in what is alleged to be the most high-profile rug pull to emerge from the 2021 crypto boom. Crypto Sleuth Investigations group flags Basis Markets’ inconsistencies Investigators have disclosed that Basis Markets displayed multiple red flags from the start. A group called Crypto Sleuth Investigations first uncovered inconsistencies around the identities of the Basis Markets team. The group further highlighted exaggerated claims about the team’s professional backgrounds. According to the SFO, the founders of Basis Markets promoted themselves as possessing over 80 years of combined experience in traditional finance, software development, and crypto tooling. The sleuths found these claims unverifiable. Basis Markets also positioned itself as a decentralized hedge fund designed to deliver delta-neutral yield through arbitrage strategies usually reserved for institutions. The team launched a membership NFT sale in November 2021 to fund the platform. They promised holders a share of trading profits, then launched the BASIS token a month later. For the token, they promised performance fee distributions and governance rights. Meanwhile, the sleuths also claimed that the project’s pitch materials reportedly projected highly unrealistic returns. In one document, Basis Markets suggested a single NFT worth $1,880 could eventually earn as much as $18,000 every month. The Basis Markets team later revised the projection to a cumulative $30,000, which the sleuths considered still implausibly high. Cobb-Webb receives CFTC sanctions One of Basis Markets’ founders, identified as Adam Cobb-Webb (A.K.A.“TraderSkew”), was later sanctioned by the U.S. CFTC (Commodity Futures Trading Commission). The commission found that between December 2021 and January 2022, Cobb-Webb was involved in multiple instances of spoofing in West Texas International crude oil futures contracts. In August 2023, the agency ordered him to pay a fine of $150,000. It also banned him from trading on any CFTC-regulated exchange for a whole year. Meanwhile, many 2021-era projects promised institutional-grade strategies with unrealistic returns. The Basis Markets case emphasizes the importance of conducting thorough due diligence on team identities, treasury controls, and verifiable track records. On the other hand, the SFO’s probe remains active. The agency states that more evidence collection is ongoing and has not ruled out further arrests. For investigators, the Basis Markets collapse highlights a structural risk that emerged from the 2021 crypto boom. Large sums flowed into dubious teams offering complex trading strategies with little to no accountability. Many regulators are now moving aggressively to police those legacy schemes, and more cases may follow. Meanwhile, the SFO is reviewing financial flows associated with the 2021 NFT and token sales to determine whether any investor capital was misappropriated. If charges are brought, the case could become a landmark in UK crypto enforcement. The SFO asserted that the case could offer a preview of how regulators intend to treat high-value token sales and decentralized finance fundraising events going forward. If you're reading this, you’re already ahead. Stay there with our newsletter .
