Japanese Police Arrest Former XRP Exchange Operator on Fraud Charges

We have seen the arrests of multiple cryptocurrency exchange operators over the past few years. In particular, people who run such businesses without the proper licenses find themselves in a world of trouble sooner or later. In Japan, the police have arrested one individual who allegedly ran a Ripple-related exchange business. He scammed at least one investor out of a deposit, which made him a person of interest to the police.

Former XPR Exchange Operator Gets Arrested

This entire story is worth taking note of, especially when considering that the same individual defrauded at least a dozen investors across different schemes. Yuki Takenaka operated a company which seemingly specialized in the exchange of XRP, which is Ripple’s native digital asset. Most readers know that Japan has taken a particular liking to XRP and Ripple, mainly due to the parent company’s relationship with Japanese banks.

The 31-year-old Takenaka is suspected of having stolen at least one deposit in the amount of US$12,500. This may not seem like much, but Japan doesn’t take kindly to nefarious exchange operations of any kind. With cryptocurrency having attained legal status earlier this year, there has been increased scrutiny of such operations in the country. That is a good thing, mind you, as it helps deter any association between cryptocurrency and illegal activity.

Interestingly enough, this “scam” dates back to March of 2015. According to the Japan Times, Takenaka collected the money during a time at which his company was failing and couldn’t issue any refunds whatsoever. So far, he has admitted to most of these charges, which further hints the police did the right thing in arresting him. Takenaka confirmed his XRP exchange was set up back in May of 2014, although things quickly went from bad to worse for his company.

Indeed, it did not take long before most users could not withdraw cash or other currency from the platform. To top it all off, the unnamed exchange platform issued IOUs which allowed Takenaka to collect even more money from users and investors. Users should have been able to exchange these IOU notes for either cash or XRP, but that did not happen either. In the end, it is believed Takenaka conned over a dozen users out of nearly US$88,000. This may not be the biggest scam in the history of cryptocurrency, but it’s not one that should be overlooked either.

The IOUs issued by this exchange only tell one part of the story, though. The police are investigating another IOU issued by Takenaka worth about twelve times as much, although few details are known about that business venture for the time being. It is evident there have been a few different attempts at defrauding investors by this specific individual, although the full amount of the damages remains unknown at the present time.

For the time being, it remains unclear how much jail time Takenaka will face due to his illegal conduct. It is evident there is still a lot of investigative work to be done in this regard, and more information should come to light in the next few weeks and months. No one can deny that cryptocurrency attracts a lot of scammers and con artists. Slowly but surely, these individuals need to be weeded out, although that is much easier said than done.