Japanese Police Arrest Alleged ¥100M Credit Card Fraud Ringleader in Monero-Focused Investigation

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.

Japanese authorities have reportedly arrested a ringleader of a credit card fraud group that allegedly used Monero (XMR) to launder proceeds from their activities, marking the first successful use of such analysis in the country.

A joint investigation by Japan's National Police Agency's Cyber Special Investigation Unit led to the arrest of a suspect accused of profiting from stolen credit cards, with losses exceeding ¥100 million ($730,000), Nikkei Asia learned on Oct. 21.

The group allegedly used privacy-focused cryptocurrency Monero to launder proceeds from their activities, according to the report. Investigators tracked the flow of Monero to identify a suspect, in what appears to be the first successful use of such analysis in Japan. However, details on how the tracing was conducted remain unclear.

The suspect, identified as 26-year-old Hiroki 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, according to the investigators.

In total, the group is believed to have carried out about 900 fraudulent transactions between June 2021 and January 2022, using stolen credit card information likely obtained through phishing schemes, investigators said. 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. The exchange stated that it was working to relist XMR and other privacy coins once it obtains the necessary approval from regulators.

Meanwhile, 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.

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