An alleged scam in Japan has resulted in the arrests of 12 individuals accused of defrauding a Tokyo-based businessman of 190 million Japanese yen (JPY) in Bitcoin (approximately USD 1.8 million).
An investigation between Tokyo and Hyogo police revealed that in July 2017, a Tokyo-based marketing executive was approached by a group of “traders” who offered him JPY 200 million for the equivalent of JPY 190 million yen in Bitcoin. After the deal was carried out between the conmen and the businessman’s agent in a Tokyo hotel, the victim suggested that he wanted to trade covertly to avoid paying commission fees while swapping crypto-to-fiat at an exchange.
The seller then transferred his cryptocurrency to an exchange wallet account in Yokohama, although the fraudsters argued that they didn’t receive the Bitcoin. It turned out that the suitcase exchanged mainly contained false banknotes. Two days later they attempted to convert the stolen Bitcoin into JPY 174.2 million yen through the Yokohama exchange.
Seven men, all in their 20s, were arrested by police last week including the alleged mastermind, 24-year-old Kenta Higashi.
Japan has warmed to Bitcoin in a big way in recent years and legislation now acknowledges it as a legal payment method, despite the Bank of Japan’s ‘Let’s think about cryptocurrencies‘ statement where the bank warned about the likelihood of Bitcoin theft. Despite some notable thefts in recent years, this hasn’t deterred traders. Individual cryptocurrency traders in Japan now exceed three million according to the country’s Financial Services Agency (FSA) figures just released.
Despite frequent incidents of investor fraud and the USD 500 million hacking of a Japanese crypto exchange earlier this year, the country still emerges as a Bitcoin haven due to recent supportive regulatory legislation introduced by the government.
Japan has previously suspended operations of several crypto exchanges on security concerns, although individual groups such as the “Tokyo 12” preying on the vulnerability of a single victim are harder to control.