Crypto Fund Flops: $28M Vanishes, Two Behind Bars

A crypto fund that raised $28M in late 2021 has gone bust, leaving investors empty-handed. The UK's Serious Fraud Office (SFO) has stepped in, arresting two men in connection with the collapse of Basis Markets. Raids were conducted in London and West Yorkshire, where digital devices and documents were seized. The fund raised money through two public campaigns: an NFT membership sale in November 2021 and a token offering in December 2021. The funds were supposed to support a crypto hedge fund that would use arbitrage strategies to generate returns for retail investors. But the fund shut down without refunds, and the token has been dead since April 2022. The SFO is investigating fraud and money laundering related to the fundraising rounds. The investigation is ongoing, and the SFO has urged victims to come forward. The case is testing the UK's ability to enforce regulations in the crypto space. The token's value dropped nearly 40% after the investigation was announced, settling at a 28% loss for the day. The token has been effectively worthless since April 27, 2022, when $10. 8 million was dumped in a single day. Basis Markets promised low-risk yields through basis trading, a strategy that exploits futures premiums across markets. However, funds were allegedly routed to personal wallets controlled by the anonymous team behind the project. One of the founders, operating under the pseudonym TraderSkew, was identified as Adam Cobb-Webb, a 48-year-old UK national. Cobb-Webb was fined $150, 000 by the CFTC for spoofing oil futures contracts during the same period he was promoting Basis Markets. The case raises questions about the risks of investing in crypto projects and the need for stronger regulations to protect investors. It also highlights the importance of due diligence and the dangers of anonymous teams promising high returns.