UK SFO's NFT Scam Case Signals Change in Crypto Regulation
- UK SFO investigates $28M NFT fraud case, arresting two men over Basis Markets scheme using false algorithmic trading promises. - Scheme combined NFT sales with hedge-fund pitches, siphoning funds into personal wallets instead of developing promised products. - Case marks first criminal prosecution centered on NFTs, signaling regulatory shift from enforcement to criminal charges in crypto fraud. - SFO highlights UK's blockchain tracking capabilities, urging victims to come forward as courts may set legal
The UK Serious Fraud Office (SFO) has initiated its first significant probe into cryptocurrency fraud, detaining two individuals in connection with a $28 million NFT-related scam that misled investors with fabricated claims of algorithmic trading profits. The scheme, known as Basis Markets, solicited investments through NFT and token sales in late 2021, but suddenly collapsed in 2022, leaving investors unable to reclaim their funds. The SFO
Basis Markets presented itself as a hybrid venture, merging NFT offerings with a hedge fund-like approach. Investors were enticed by assurances of automated trading systems and shared profit pools, with NFTs providing "exclusive membership" to these benefits. Yet, investigators discovered that the capital was diverted into private accounts rather than being used to build the advertised platform. The project's downfall in June 2022 was
Nick Ephgrave, director of the SFO, highlighted the agency's increasing proficiency in tackling crypto-related crime, remarking, "
This case comes after the high-profile conviction of Zhimin Qian, dubbed the "Crypto Queen," who was found guilty of laundering £5 billion in
Officials cautioned that more such incidents could surface as law enforcement agencies enhance their investigative tools. The Crown Prosecution Service’s 2025 Economic Crime Strategy lists cryptocurrency and cyber-enabled scams as top concerns, highlighting the UK's resolve to tackle financial crimes involving blockchain. The SFO has called on victims and informants to step forward, indicating this case may establish important legal benchmarks for upcoming prosecutions
The downfall of Basis Markets has attracted worldwide notice, with online discussions emphasizing its role as a milestone in crypto law enforcement. Experts suggest the outcome could shape judicial perspectives on fraud in the digital asset arena,
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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