Japan’s Police Uses Monero To Track Down ¥100M Scam Ringleader

• Japan’s National Police Agency has made crypto history by analyzing Monero to make an arrest.
• Yuta Kobayashi, 26, was arrested by Japanese authorities on suspicion of computer fraud.
• Kobayashi was found as a suspect after the agency analyzed around 900 fraudulent Monero transactions in other people’s names.

Japan’s National Police Agency announced it had arrested 18 members of a scam group, including the suspected ringleader, who have been running money laundering schemes.

The investigation, which featured nine prefectural police forces, is the first time authorities have made an arrest of a bad actor by analyzing Monero (XMR)  transactions.

Ringleader Arrested

On Monday, Oct. 21, Japan’s police agency said it had arrested Yuta Kobayashi on suspicion of computer fraud.

Kobayashi, 26, is accused of listing fake products on the e-commerce website Mercari between June and July 2021.

The products were then bought across 42 different purchases with credit cards in other people’s names.

Police believe the credit card information was acquired through “phishing” tactics.

According to Japan’s Credit Association, damage from scammed credit cards hit a record high of ¥54.1 billion ($360 million) in 2023.

Monero Aids Arrest

Japan’s police agency said Kobayashi was found a suspect after the agency analyzed around 900 fraudulent Monero transactions in other people’s names.

It is estimated the transactions led to over 100 million yen ($667,216) in damages.

Monero is known for its emphasis on higher anonymity , making it an unfortunate target for bad actors to utilize. Unlike more transparent networks, Monero ensures that transaction details are hidden by default.

The scam group allegedly found new members by advertising part-time jobs on social media.

Japanese authorities believe the group is part of Tokuryu, an online organized crime group that is said to be taking over from the Yakuza in the country .

The news follows a warning from the Federal Bureau of Investigation (FBI) that crypto-related scams are on the rise and becoming increasingly complicated.

In a Sept. 9 report, the FBI revealed that in 2023, over 69,000 reported cases of crypto-related scams resulted in losses of $5.6 billion—marking a 45% spike from the previous year. FBI Director Christopher Wray said crypto scams were “skyrocketing in severity and complexity.”

The stark increase has put extra pressure on authorities to adapt and innovate in order to keep ahead of potential bad actors.