A joint team from Japan’s National Police Agency and nine local police departments arrested 18 individuals for committing fraud using Monero (XMR).
Fraud Methods
According to numerous reports, the defendants conducted fake transactions using stolen credit card information, particularly through the second-hand goods selling app Mercari. The group is accused of causing approximately 2.7 million yen in damages to Mercari during June and July 2021. They reportedly executed around 900 fraudulent transactions, accumulating an estimated total of 100 million yen (670,000 dollars).
Tracking Monero
Japanese authorities noted that this case marks the first incident involving tracking Monero transactions. Monero is known for its robust privacy features that complicate the tracking of funds. Due to the lack of address balance tracking in Monero’s public ledger, analyses across the network are quite limited. Because of these attributes, tracking Monero transactions is generally challenging. It was stated that Japan’s Cyber Special Investigation Unit was established to combat cybercrimes involving cryptocurrencies and played a crucial role in this operation.
Significance of the Operation
The investigation commenced in August 2024 following the establishment of Japan’s Cyber Special Investigation Unit aimed at fighting cryptocurrency-related crimes. It has now emerged that 18 individuals were identified and arrested. However, the specific methods used by the team to detect the secret network activities remain unknown, with various hypotheses, including the possibility of entrapment on P2P exchanges. Earlier this year, the world’s largest exchange, Binance, delisted Monero, and Kraken followed suit in two European countries. This operation in Japan is regarded as a significant step in preventing the illicit use of cryptocurrencies.
The arrests in Japan represent a significant event in the global practice of combating cybercrime associated with cryptocurrencies. Japanese law enforcement agencies have demonstrated the ability to address new challenges related to the privacy of cryptocurrency-based transactions.