Tokyo Police Arrest 8 People For Operating A 68 Million Cryptocurrency Ponzi Scheme

So, while Japan is working on allowing up to 340,000 foreign workers over the span of five years, another bombshell has hit the country. Japan has been unexpectedly hit by another cryptocurrency scam that might take a while to recover from. Luckily, the police have been able to arrest a suspected group involved in running this cryptocurrency Ponzi scheme.

Technically, a Ponzi scheme is a form of investment scam where clients or investors are lured in with the promise of getting a huge profit with little or no risk at all.

Individuals or companies involved in Ponzi schemes tend to drive all their energy to enticing new investors into making huge investments. With this new income, original clients get paid their returns which comes in the form of a legitimate transaction with awesome profits.

Technically, a Ponzi scheme is a form of investment scam where clients or investors are lured in with the promise of getting a huge profit with little or no risk at all.

These Ponzi schemes tend to rely on the constant inflow of funds to continuously yield returns to former clients. And, when they run out of this flow, the scheme tends to fall apart.

Ponzi schemes tend to pop up more often that they are needed. However, not every one of them is that big to make the headlines. Still, every once in a while we see news coming out about how authorities of a country unveiled a long-running and extensive Ponzi scheme.

An awesome example of these schemes is one exposed in 2006 and another which was unveiled in 2008. These schemes were said to have been the biggest ever reported before them. The enormous Ponzi scheme ever recorded till date was that of Bernard Madoff who made away with $65 billion from clients that came from different parts of the world.

Well, all that is in the past! Now, according to the local news platform known as the Asahi Shimbun, the police in Tokyo has apprehended eight men that are suspected to have connections with a Ponzi scheme that conned more than $68 million in the form of cryptocurrencies from up to 6,000 different people.

According to reports from the Metropolitan police in Tokyo, these men have been in violation of the Financial Instruments and Exchange Law (FIEL) when they failed to register their business with the appropriate authorities and regulators.

These men had been making use of cryptocurrencies in funding their Ponzi scheme, and that’s how they’ve been able to maintain some form of anonymity. And, with transactions involving cryptocurrencies being unrecognized as securities by the FIEL, these perpetrators went on undetected until their victims starting speaking up.

According to the lawyers standing in for the victims of the pyramid scheme, these scammers promised returns of about three to 20% by how huge the investment is. Also, it was said the men promised victims of even bigger returns if they can convince or refer other people to join in the investment.

However, a lawsuit has been filed by the defendants against the men for the damages worth over $3 million.

This year has been somewhat of a struggle with Japan trying to recover from different cryptocurrency scams. According to reports in September, hackings has caused the loss of more than $540 million in the form of cryptocurrency in just the first six months in 2018.

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