Monero probe leads to arrest of ¥100m fraud suspect: report

A Monero-focused investigation has reportedly led to the first arrest of a suspected credit card fraud ringleader worth ¥100 million in Japan.

A joint investigation by the Cyber ​​Special Investigation Unit of the Japan National Police Agency led to the arrest of a ringleader accused of profiting from losses exceeding ¥100 million on stolen credit cards, Nikkei Asia has learned.

According to a report dated October 21, the group allegedly used Monero (XMR) to launder proceeds from its operations. Investigators tracked Monero flows, marking the first successful use of this type of analysis to identify a suspect in Japan. However, details about how the tracking was done remain unclear.

Kobayashi is accused of listing fake products on an online marketplace between June and July 2021 and simulating 42 transactions using stolen credit card details, defrauding the platform of ¥2.75 million in sales payments. Investigators believe the group made approximately 900 fraudulent transactions between June 2021 and January 2022, possibly using stolen credit card information obtained through phishing schemes.

Police arrested 18 people affiliated with the group, which recruited members through social media ads for “black market businesses” and communicated using encrypted messaging apps. Authorities classify the organization as an “anonymous, volatile criminal organization.”

Monero faces more scrutiny as authorities warn

The arrest comes as Monero faces increasing pressure with multiple delistings from centralized exchanges in Europe. In early October, Kraken announced that it would halt Monero trading and deposits in the European Economic Area due to regulatory changes.

Japan’s Financial Services Agency has been examining privacy-focused cryptocurrencies since 2018, urging local exchanges to drop support for Monero, Zcash and others to curb money laundering and cybercrime. In early 2024, analysts at French blockchain analysis firm Kaiko reported that market liquidity for privacy tokens, including Monero and Zcash, had fallen to all-time lows as crypto exchanges continued to delist these assets.