Eight Arrested in Japan on Suspicion of Running Multi-million-dollar Crypto Pyramid Scheme

Japan is the latest country to be hit with a cryptocurrency pyramid scheme. This one spans across 44 prefectures in the country, involves approximately 6,000 victims and has raised almost $70 million.

Ponzi and pyramid schemes definitely appear to be the scams of choice for crypto fraudsters out there. We’ve reported on alleged cases happening all over the world, including in India and Poland. Now, it seems as if its Japan’s turn. According to The Asahi Shimbun, this latest case involves over 6,000 victims and is worth nearly $70 million.

Tokyo’s Metropolitan Police Department arrested eight people on suspicion of violating the Financial Instruments and Exchange Law as they did not register their business with the required authorities.

LBN Denaro ICO Scam

ROIs That are Too Good to be True

It is alleged that the accused hosted events and seminars where they enticed potential investors to part with their cash and crypto promising impressive returns of between 3 and 20% depending on how much they contribute. Perhaps in a bid to lend an air of legitimacy, these seminars also had foreign speakers. However, a potential warning sign was that these events also requested that attendees bring in more investors if they would like to see their contribution grow even more.

The alleged scammers requested that investments be made in Bitcoin and any cash contributions would, apparently, be used to buy bitcoins. Nine such victims gave a combined total of 29 million yen in cash last year, which equates to just under $260,000. They were told they were contributing to a U.S. investment firm.

Last month saw 73 victims file a lawsuit against the suspected fraudsters and are requesting 370 million yen, which is over $3 million, in restitution. However, investigators believe that there are, in fact, 6,000 victims located all over Japan. It is estimated that the alleged scheme raised 500 million yen in cash alone. This is nearly $4.5 million. The rest of their ill-gotten gains were received in crypto.

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Japan and Crypto Regulations

Because of this crypto component, the suspects flew under the radar of the Financial Instruments and Exchange Law as virtual currencies are not recognized as securities under its legislation. It is not clear when the alleged fraudsters will have their day in court.

Live Bitcoin News previously reported that Japan’s Financial Services Agency (FSA) has given the cryptocurrency industry self-regulatory status in the country, giving the Japan Virtual Currency Exchange Association authority when it comes to any industry violations.

Do you think that the eight accused will be harshly punished? How will Japan’s new view on crypto regulation impact the future of crypto fraud in the country? Let us know in the comments below!

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ECB Official Decries Bitcoin as ‘Evil Spawn’ of Financial Crisis, Ripple Consolidates Lawsuits

ECB Official Decries Bitcoin as ‘Evil Spawn’ of Financial Crisis, Ripple Consolidates Lawsuits


In recent regulatory news, an executive board member of the European Central Bank (ECB) has given a dismissive appraisal of bitcoin and rejected the prospect of central banks issuing state-backed digital currencies in the foreseeable future. In other news, Ripple Labs has moved to consolidate three lawsuits into a single federal suit, while the police have arrested eight individuals in Tokyo who are suspected of involvement in a $68.4 million cryptocurrency pyramid scheme.

Also Read: French Financial Regulator Estimates ICOs Have Raised $21.9B Globally

ECB Board Member Dismisses Prospect of
Central Bank-Issued Virtual Currencies

ECB Official Decries Bitcoin as 'Evil Spawn' of Financial Crisis, Ripple Consolidates LawsuitsBenoit Coeure, an executive board member of the ECB, has issued a critical appraisal of bitcoin and cryptocurrency in general. He described them as “the evil spawn of the financial crisis” in a recent speech at the Bank for International Settlements in Basel.

“Bitcoin was an extremely clever idea,” Coeure stated. “Sadly, not every clever idea is a good idea.”

Coeure was also dismissive of the prospect of central bank-issued virtual currencies becoming a reality within the next 10 years. “There is broad agreement that a central bank digital currency, in whatever form, is unlikely to be issued within the next decade,” he said.

Ripple to Take Lawsuits to Federal Court

ECB Official Decries Bitcoin as 'Evil Spawn' of Financial Crisis, Ripple Consolidates LawsuitsRipple Labs has moved to consolidate three ongoing class-action lawsuits the company faces into a single federal suit. Various lawyers have described the move as “slick” and exhibiting “tactical brilliance.”

The suits were filed by David Oconer, Vladi Zakinov and Avner Greenwald, who are collectively seeking more than $167 million in damages on behalf of “thousands” of investors. Ripple is seeking for the case to be heard at the U.S. District Court for the Northern District of California. The combined number of plaintiffs involved in all of the cases exceeds 100.

Tokyo Police Arrest 8 Over
$68.4M Pyramid Scheme

ECB Official Decries Bitcoin as 'Evil Spawn' of Financial Crisis, Ripple Consolidates LawsuitsPolice in Tokyo have arrested eight men for their alleged involvement in a pyramid scheme that duped roughly 6,000 investors out of an estimated 7.8 billion yen ($68.4 million) worth of cryptocurrency. The individuals are suspected of violating Japan’s Financial Instruments and Exchange Act by failing to register their business operations with the relevant authorities.

Investors were recruited at events such as seminars, where they were promised monthly returns of between 3 percent and 20 percent. Six of the eight individuals who were arrested have reportedly confessed to the allegations made against them.

Last month, a group of 73 individuals who fell victim to the scheme filed a lawsuit with the Tokyo District Court. They are seeking 370 million yen ($3.276 million) in damages.

Do you think Ripple will be successful in consolidating the three lawsuits it faces into a single federal suit? Share your thoughts in the comments section below.

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Japanese Regulatory Body FSA Mulls over Monitoring Cryptocurrency Wallets

Source: btcearn

The Japanese regulatory body Financial Services Agency (FSA) will now shift its radar to cryptocurrency wallets, after regulating exchanges. The decision was arrived at, earlier on Friday, after the FSA held a deliberation joint meeting on Monday to discuss the Japan cryptocurrency market and regulations. The minutes of the meeting conveyed that there was a need to regulate cryptocurrency wallets and the companies offering them.

According to a report by news portal, Bitcoin.com, new businesses carrying out cryptocurrency-related activities in the country need to register as crypto exchanges with the FSA. The portal further quoted a local media outlet as saying, “Wallets are like bank accounts that store virtual currencies. While wallet service providers handle large amounts of virtual currencies like exchange companies, they are not targeted by laws and regulations.”

The FSA further went on to explain that currently wallets do not engage in buying and selling; they merely hold and manage transfers for their customers who are registered with the site. Since the companies manage funds, the body believes wallets are subject to regulations. In the minutes, the regulations for wallet services will be in accordance with the international standards for preventing money laundering and terrorism financing set by the Financial Action Task Force (FATF). The FATF has stated that some of the notable risks include, wallet failures, cyber attacks and money laundering.

The FSA outlined some of the probable regulatory measures such as maintenance of internal control systems, separate management of cryptocurrencies belonging to the service providers and customers, audits of financial statements, publication of policies in the event of stolen funds in a hack and retaining funds to repay customers, the news portal reported.

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A blockchain enthusiast, a wannabe-crypto investor and an all-around enthusiast! Loves travelling, especially to ASI-protected areas, believes in giving her best shot at everything she does! Definitely an introvert.