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

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

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

According to a report, on Oct. 21, the group allegedly used Monero (XMR) to launder proceeds from their activities. Investigators tracked the flow of Monero, marking the first successful use of such analysis in Japan to identify a suspect. However, details on how the tracing was conducted remain unclear.

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

The police have arrested 18 individuals connected to the group, which recruited members through social media advertisements for “black market jobs” and communicated using encrypted messaging apps. Authorities classify the organization as an “anonymous, fluid crime syndicate.”

Monero faces increased scrutiny amid warnings from authorities

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

Japan’s Financial Services Agency has scrutinized privacy-focused cryptocurrencies since 2018, urging domestic exchanges to drop support for Monero, Zcash, and others to curb money laundering and cybercrime. In early 2024, analysts from French blockchain analytics firm Kaiko reported that market liquidity for privacy tokens — including Monero and Zcash — had fallen to all-time lows as crypto exchanges continued to remove these assets from their listings.