The Japan National Police Agency’s Cyber ​​Special Investigation Unit led the capture of ringleader Kobayashi, who was accused of profiting from stolen credit cards. The investigation revealed that the total loss from the gang’s activities was over 100 million yen.

According to a report published on October 21, members of the gang used Monero to launder proceeds from stolen credit cards. By tracking the flow of Monero, investigators conducted the first successful analysis to identify a suspect in Japan. However, the details of how this monitoring is done remain unclear.

Kobayashi is accused of listing counterfeit products on an online marketplace between June and July 2021 and simulating 42 transactions with stolen credit card information. It is stated that as a result of these fraudulent actions, he received a sales payment of 2.75 million yen from the platform.

Investigators believe the group carried out approximately 900 fraudulent transactions between June 2021 and January 2022. Many of these transactions were made using stolen credit card information, possibly obtained through phishing schemes.

Police said 18 people were arrested in connection with this fraud ring and that the group was recruiting members for its “black market businesses” through social media ads. Additionally, members of the gang communicated using encrypted messaging applications. Authorities classified this organization as an “anonymous, fluid criminal syndicate.”

The arrest comes at a time when Monero is facing increasing pressure. Many centralized exchanges in Europe have decided to delist some privacy-focused cryptocurrencies, including Monero.

In early October, Kraken announced that it would cease trading and investing in Monero in the European Economic Area. This could negatively impact the market value and liquidity of Monero.

Japan’s Financial Services Agency has been scrutinizing privacy-focused cryptocurrencies since 2018 and aims to combat money laundering and cybercrime by calling on local exchanges not to support Monero, Zcash and others.

The decreased interest of cryptocurrency exchanges in privacy tokens has led to a decrease in the liquidity of these assets.

In early 2024, analysts from French blockchain analysis firm Kaiko reported that market liquidity for privacy tokens such as Monero and Zcash had fallen to all-time lows.

While this situation makes the future of privacy-focused cryptocurrencies like Monero uncertain, it also shows how deep the impact of legal regulations can be.

Therefore, this investigation conducted by Japan reveals how much regulatory pressure has increased on both cryptocurrency markets and privacy-oriented tokens.