UK government targets cybersecurity overhaul on heels of Basis Markets investigation

The UK government has introduced the “Cyber Security and Resilience Bill” to Parliament, aiming to tighten regulations on a broader range of tech and service providers in response to rising cyber threats.

The bill expands existing Network and Information Systems (NIS) laws, requiring IT management, tech support, and cybersecurity providers to meet the same security standards as critical infrastructure. Non-compliance could result in penalties tied to company turnover.

The legislation is part of the UK’s strategy to bolster network security, improve cyber incident response, and safeguard against state-sponsored attacks from countries like China, Iran, and North Korea. A recent study revealed the average cost of a major cyber attack in the UK is £190,000, totaling an estimated £14.7 billion annually.

In addition, the bill includes provisions to combat AI misuse, specifically preventing the creation of harmful content, such as child sexual abuse material. It empowers trusted organizations to test AI models for vulnerabilities before they can be exploited.

This cybersecurity push comes on the heels of a high-profile criminal investigation into Basis Markets, a failed crypto hedge fund accused of defrauding retail investors out of $28 million.

The UK Serious Fraud Office (SFO) has arrested two men in connection with the scheme, which raised funds through unregistered NFT and token sales in 2021. Despite presenting itself as a “low-risk” crypto hedge fund, Basis Markets abruptly collapsed in 2022, leaving investors with worthless assets.

The SFO’s investigation into the scheme, which initially went silent for over three years, has now escalated with recent raids and an appeal for investors to come forward. This investigation adds to the UK’s growing focus on regulating the cryptocurrency space, following the conviction of Zhimin Qian, the mastermind behind a multibillion-dollar Bitcoin fraud.

As the UK strengthens its cybersecurity laws and pursues crypto fraudsters, the government’s push aims to protect citizens, businesses, and public services from evolving digital threats.