Japanese Authorities Nab 18 Suspects in Historic Monero Transaction Investigation: Report

In a first for Japanese law enforcement, authorities have tracked and analyzed Monero (XMR) transactions to arrest 18 alleged scammers.

Yuta Kobayashi, the 26-year-old suspected leader of the group, has been charged with laundering funds through Monero and engaging in computer fraud by exploiting stolen credit card details.

Money Laundering Activities Through Monero

According to a recent report by the local media outlet Nikkei, Kobayashi led a group that illicitly profited by using credit cards under other people’s names. They allegedly laundered money using the privacy-focused cryptocurrency Monero.

The Cyber Special Investigation Unit of the National Police Agency and the Saitama Prefectural Police, along with other authorities, were able to trace the transactions and identify Kobayashi. The group’s operations involved listing fake products on the marketplace “Mercari” and completing 42 fraudulent transactions using stolen credit card information in June and July 2021, defrauding the platform of over 2.75 million yen, worth approximately $18,400.

During the same period, they conducted around 900 money laundering transactions using Monero, worth around 100 million yen or $670,000.

Investigators believe the stolen credit card details were likely obtained through phishing scams via fake websites or emails. They also discovered that the group used anonymous communication apps and recruited members through illegal job listings on various social media platforms.

Monero Faces Growing Restrictions

Monero has faced increasing scrutiny from regulators worldwide due to its strong privacy features, which make it difficult to trace transactions and identify users. This has raised concerns about its potential use in illegal activities, such as money laundering and tax evasion.

As a result, various countries have implemented measures to restrict or ban the use of Monero. For instance, Dubai’s Virtual Assets Regulatory Authority (VARA) prohibited all activities involving privacy coins.

Exchanges like Kraken have delisted Monero for users in certain regions, reflecting a growing trend of regulatory ire aimed at these cryptocurrencies. Additionally, Europol recently revealed in its report that Monero is being increasingly used by ransomware groups as an alternative to Bitcoin.