There has been a massive surge in cryptocurrency related crimes reported to Japanese police in the past year – almost ten times higher than that of last year.
National Police Agency (NPA) officials report an increase from 669 cases last year to almost 6,000 from January to October this year. The majority of incidents come from cryptocurrency exchange operators which have been required by law to report any suspicious transactions since new legislation was imposed in April this year.
While the increase is significant it still pales in comparison to the overall number of reported incidents across the broader financial industry in Japan. Within the same time period this year, over 340,000 suspicious incidents were reported to police regarding financial fraud or similar activity occurring within traditional banking and financial institutions.
Police believe that cryptocurrency exchange operators are enacting a higher level of vigilance due to the rise in thefts that have occurred this year. In early 2018, a whopping 534 million dollars worth of NEM tokens were stolen from Japanese crypto exchange Coincheck, in what is believed to be the largest ever theft of digital assets in history. An official for the NPA noted:
“We have seen some large-scale cryptocurrency thefts, and operators are believed to be scrutinizing transactions more rigorously,”
The National Public Safety Commission released a report today (Thurs, Dec 6) outlining the ease at which cryptocurrency can be transferred overseas to evade regulatory action. It also highlighted a number of cases in which duplicate photos were used for several different accounts, indicating attempts at identity evasion.
Other cases the police are investigating involve users logging into locally registered accounts from overseas and foreigners selling cryptocurrency account and password information within the country.