$68.42 Million Stolen In Bitcoin Scheme
Since Bitcoin’s inception, a mere decade ago, malicious users of the world’s first blockchain have sought to capitalize on the pseudonymous and anti-governmental nature of the Bitcoin Network and other crypto platforms. And although governments have begun to crack down on this innovation, crypto-related schemes and scams are still rife in the dark corners of this industry.
The Asahi Shimbun, an Asian media outlet, recently reported that a number of men were arrested for their affiliation with a purported crypto-centric pyramid scheme.
More specifically, the local news station revealed that Tokyo’s fuzz arrested eight men on November 14th, who were all suspected of taking part in a Bitcoin-related scheme that reportedly raked in 7.8 billion Japanese Yen, or $68.42 million in America’s “political dollars” worth of fiat and digital assets.
The felons, who were arrested on suspicions of violating Japan’s Financial Instruments and Exchange Law by failing to register their “business” with authorities, garnered that jaw-dropping sum from 6,000 naive investors, who were situated across 44 of Japan’s multitude of prefectures.
Tokyo’s police department claimed that the suspects tried to skirt their way around traditional regulations regarding financial crime by setting up shop in crypto, but, of course, their apparent plan quickly bit the dust.
So what were they arrested for?
Well, the potential convicts had reportedly solicited cash investments for a “firm,” named “Sener,” which was touted as a US-based investment organization. In one fell swoop, the men reportedly had nine individuals allocate 29 million Yen ($255,000) to “Sener,” who claimed that their funds would be used to purchase Bitcoin (BTC) and other digital assets for a lucrative investment opportunity.
This lucrative investment opportunity, as it turned out, was nothing more than a scam, as Sener seminar attendees were reportedly told that the “firm” would be able to make 3-20% month-on-month, which is obviously unfeasible, even for players like Warren Buffet. And of course, to put a cherry on the metaphorical Bitcoin scam cake, the scam’s operations mirrored a traditional pyramid scheme.
As alluded to earlier, however, the aforementioned $29 million was just the tip of the iceberg, as Tokyo authorities believe that the ring had been sent cryptocurrency worth billions of yen. Interestingly, while two vehemently denied the accusations, six of coughed it up, admitting to the claims that they had committed a crime.
Still, a class lawsuit, which was filed by 73 of Sener’s clients in Tokyo’s District Court in October, remains on the table. The class is seeking 370 million Yen ($3.25 million) in financial damage.
Even Amid Bearish Downtrend, Crypto- And Bitcoin-Related Crime Rages
Just recently, a Phoenix, Arizona native, Joseph Kim, was sentenced to jail for stealing millions of dollars worth of BTC and Litecoin (LTC). The CFTC, along with the United States District Court for the Northern District of Illinois, has called for Kim to pay $1.146 million in restitution (in cash, not in BTC or LTC) to Consolidated, his former employer, and his clients. As it stands, the convict will be unable to trade or sign up for digital asset exchanges, with this move likely being made to mitigate future risk.