Investigation into Basis Markets
The U.K. Serious Fraud Office (SFO) has launched an investigation into a collapsed cryptocurrency venture, Basis Markets, which is accused of defrauding investors out of approximately $28 million. Recent developments include the arrest of two individuals linked to the case. The SFO executed search warrants in areas of Herne Hill and near Bradford, confiscating various digital devices and documentation as part of their inquiry.
Fundraising Events and Promises
Details reveal that Basis Markets raised funds through two major fundraising events — an NFT membership sale in November 2021 and a token offering in December of the same year. The organization appealed to retail investors by promising to develop strategies for a crypto hedge fund aimed at generating returns through arbitrage.
Commitment to Addressing Fraud
SFO Director Nick Ephgrave emphasized the agency’s commitment to addressing fraud in the cryptocurrency space, stating,
“As our cryptocurrency expertise grows, we are resolved to hold accountable those who exploit it to deceive investors.”
As the investigation progresses, the SFO is seeking additional information from the public which may aid their efforts.
Market Impact and Token Activity
Following the announcement by authorities, the BASIS token experienced a dramatic decline, falling nearly 40% within hours, before stabilizing at a 28% loss for that day. Market data indicates that the token has been inactive since a notable drop in value on April 27, 2022, when roughly $10.8 million worth of tokens were sold in a single day. By June 2022, investors were reportedly informed that the project could not continue as planned due to impending new regulations in the U.S., as stated by the SFO.
Scrutiny of Founders
The founders of Basis Markets, particularly one known as TraderSkew—likely identified as Adam Cobb-Webb, a 48-year-old UK citizen—had previously presented the venture as a “yield optimizer for directionless trading.” Cobb-Webb has come under scrutiny, having been fined $150,000 by the Commodity Futures Trading Commission for engaging in deceptive practices during the same time frame he was involved with Basis Markets.
Allegations of Misappropriation
According to investigations by the firm Crypto Sleuth Investigations, it is alleged that the project’s funds were misappropriated, with investments seemingly redirected into personal wallets belonging to anonymous team members. Decrypt has actively sought comments from Crypto Sleuth on these allegations and the status of investor restitution.
