Japanese Authorities Arrest 18 in Monero Scam Investigation

A coordinated effort by Japanese law enforcement has led to the arrest of 18 individuals involved in a large-scale scam using the cryptocurrency Monero (XMR). The National Police Agency and a special task force from nine prefectural police departments were key players in uncovering this operation. According to reports, the suspects allegedly exploited stolen credit card information to make fraudulent purchases, primarily through the popular flea market app Mercari.

Fraudulent Transactions Exposed

Between June and July 2021, the group reportedly conducted 42 fraudulent transactions, defrauding Mercari of around 2.7 million yen. Over time, authorities believe the group carried out roughly 900 fraudulent transactions, amassing close to 100 million yen (about $670,000). This case is particularly notable as it marks the first instance in which Japanese law enforcement successfully traced Monero transactions, which are notoriously difficult to follow due to the coin’s privacy-focused features.

Monero’s unique privacy technology, including ring signatures, makes it challenging to track funds. These features obscure transaction details and prevent the blockchain from showing address balances, making on-chain analysis nearly impossible.

The arrests followed the launch of an investigation in August 2024, driven by Japan’s Cyber Special Investigation Unit, created to counter the rising wave of cybercrime involving cryptocurrencies. This success is a significant achievement for Japanese authorities as they work to combat complex cryptocurrency-related crimes.

In addition to the arrests, Monero has faced scrutiny globally. Earlier this year, Binance, the world’s largest exchange, delisted Monero, and Kraken removed it in two European countries, adding to the growing challenges faced by privacy coins.