Key Insights
- •The UK Serious Fraud Office announced its first major crypto market investigation on November 20, targeting a $28 million scheme called Basis Markets.
- •This case signifies a shift in how UK authorities approach digital assets, deploying dedicated fraud investigators.
- •Recent regulatory moves, including FCA-supervised crypto ETPs and integration with the Financial Services and Markets Act, demonstrate that UK regulators now treat the sector as mainstream finance.
Basis Markets Investigation Launched
In crypto news, the Serious Fraud Office issued a press release on November 20 announcing an investigation into Basis Markets, a suspected fraudulent crypto market scheme that raised approximately $28 million. Investigators executed raids in West Yorkshire and London, with support from the Metropolitan Police and West Yorkshire Police, arresting two men in their thirties and forties on suspicion of fraud and money laundering. Basis Markets raised capital through two public fundraisers in late 2021, one via non-fungible token sales in November and another in December, positioning the funds as backing for a crypto hedge fund. In June 2022, the project informed investors it could no longer proceed as planned due to proposed US regulatory changes.
SFO Director Nick Ephgrave stated that the agency had expanded its cryptocurrency capabilities and expertise, emphasizing its determination to pursue anyone who uses cryptocurrency to defraud investors. Solicitor General Ellie Reeves characterized fraud as destructive to communities and business confidence, pledging support for SFO efforts to tackle cryptocurrency fraud.
Evolution of UK Crypto Regulatory Framework
The investigation represented the culmination of a broader shift in UK crypto oversight that accelerated from 2023 through 2025. Several years prior, UK authorities engaged with crypto primarily through anti-money laundering registration requirements, basic tax guidance, and consumer warnings. Recent crypto news has demonstrated that digital assets have moved from a peripheral concern to a mainstream financial market subject to a full regulatory apparatus.
HM Treasury’s draft Financial Services and Markets Act 2000 (Amendment) Order 2025 brought core cryptocurrency functions within the FSMA regime. Operating trading platforms, custody services, arranging transactions, and advising on cryptoassets all became regulated activities under the same legislative framework governing securities and derivatives. The financial promotions regime expanded in October 2023 to bring qualifying cryptocurrencies fully into scope. Any retail-facing crypto market advertisement required approval from an authorized firm, with the FCA issuing detailed guidance on “fair, clear and not misleading” standards. The digital assets received treatment equivalent to that of other high-risk investments, with dedicated staff training and control systems expectations replacing generic consumer warnings.
Market Infrastructure and Enforcement Maturation
The Bank of England and the FCA jointly launched the Digital Securities Sandbox in 2024, issuing policy statement PS24/12 with guidance on using distributed ledger technology to issue, trade, and settle securities under modified rules. The initiative focused on tokenized instruments as serious components of UK capital markets rather than speculative assets.
The SFO disclosed additional funding specifically allocated to build crypto asset-recovery capability. This approach contrasted sharply with prior years, when crypto market fraud cases were typically handled by local police forces lacking specialized resources or technical expertise. The enforcement posture shift extended beyond investigation announcements. The SFO appealed directly to investors for information about Basis Markets, treating the case with the same seriousness applied to traditional financial fraud investigations involving comparable amounts.
Crypto ETP Market Reopens to Retail Investors
UK regulators executed a significant reversal on retail crypto market access, reinforcing the sector’s integration into mainstream finance. In 2021, the FCA banned the retail sale of derivatives and exchange-traded notes referencing unregulated digital assets on investor protection grounds, which pushed UK retail investors to overseas exchanges. The first policy shift came in March 2024 when the FCA stated it would not object to recognized investment exchanges creating market segments for crypto exchange-traded notes restricted to professional investors. The London Stock Exchange opened a dedicated crypto ETN segment on May 28, 2024, admitting bitcoin and ether products from 21Shares and WisdomTree.
On August 1, 2025, the FCA announced retail access would reopen from October 8, 2025, reversing the blanket retail ban. This reopening applied only to Bitcoin and ether products listed on FCA-recognized exchanges, with the crypto derivatives ban remaining in place. The Treasury clarified in October 2025 that crypto ETNs qualified for registered pension schemes and ISA eligibility, treating them identically to other mainstream exchange-traded products. Bitwise and WisdomTree responded by listing multiple crypto ETPs on the LSE’s retail segment with competitive fee structures.
The regulatory architecture surrounding crypto ETPs mirrored established securities oversight, including full FSMA disclosure requirements and eligibility for tax-advantaged wrapper status. This integration demonstrated that the UK authorities are now positioning the crypto market within the regulated financial perimeter rather than as an external phenomenon requiring special handling. The Basis Markets investigation, combined with FSMA integration and the reopening of the ETP market, illustrated a fundamental shift in the UK regulatory posture. Authorities deployed heavyweight enforcement agencies, applied security-level regulatory frameworks, and granted access to the mainstream market while maintaining strict oversight and consumer protection standards.