Japanese authorities recently made headlines by arresting 18 individuals involved in a scam that used Monero (XMR).
The National Police Agency and a task force from nine prefectural police departments led the operation. Reports suggest that these suspects exploited stolen credit card information to make fraudulent purchases. Most of these transactions occurred on the flea market app, Mercari.
Between June and July 2021, the group reportedly conducted 42 fraudulent transactions, costing Mercari about 2.7 million yen. Overall, they are believed to have carried out around 900 fake transactions, racking up losses of about 100 million yen, or approximately $670,000.
This case is significant. It marks the first time Japanese law enforcement successfully traced Monero transactions to make arrests. Monero is known for its strong privacy features, making it difficult to track. It uses ring signatures to hide funds, making them almost untraceable. Plus, Monero's blockchain doesn’t keep track of address balances, which limits on-chain analysis.
The investigation began in August 2024, following the establishment of Japan’s Cyber Special Investigation Unit. This unit was created to tackle the growing issue of cybercrime involving cryptocurrencies. Earlier this year, major exchanges like Binance and Kraken delisted XMR in certain regions, adding to the scrutiny surrounding this cryptocurrency.