Ripple Trade Japan Fraud: Difference between revisions

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{{Imported Case Study 2|source=https://www.quadrigainitiative.com/casestudy/rippletradejapanfraud.php}}
{{Case Study Under Construction}}{{Unattributed Sources}}
{{Unattributed Sources}}


[[File:Rippletradejapan.jpg|thumb|Ripple Trade Japan]]The Ripple Trade Japan platform was run a single individual in Tokyo. The service launched in 2014, and by March of 2015 there was no response to requests for withdrawals. Roughly $1m USD was pocketed by the CEO. While he has been arrested, it does not appear that funds were recovered as they'd already been spent.
[[File:Rippletradejapan.jpg|thumb|Ripple Trade Japan]]The Ripple Trade Japan platform was run a single individual in Tokyo. The service launched in 2014, and by March of 2015 there was no response to requests for withdrawals. Roughly $1m USD was pocketed by the CEO. While he has been arrested, it does not appear that funds were recovered as they'd already been spent.


This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.<ref name="mainichi-7680" /><ref name="mainichi-7681" /><ref name="bitcoinist-7682" /><ref name="ccn-7683" /><ref name="japantimes-7684" /><ref name="haydentifftwitter-7685" /><ref name="epfl-7686" /><ref name="ethereumworldnews-7687" /><ref name="xrpchat-7688" /><ref name="tokyoreporter-7689" /><ref name="xrpchat-7690" /><ref name="rippletradejapanarchive-7691" />
This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.<ref name="mainichi-7680" /><ref name="mainichi-7681" /><ref name="bitcoinist-7682" /><ref name="ccn-7683" /><ref name="japantimes-7684" /><ref name="haydentifftwitter-7685" /><ref name="epfl-7686" /><ref name="ethereumworldnews-7687" /><ref name="xrpchat-7688" /><ref name="tokyoreporter-7689" />


== About Ripple Trade Japan ==
== About Ripple Trade Japan ==
The Ripple Trade Japan website presented an opportunity to potentially turn ¥10,000 into ¥100 million, presenting it as a once-in-a-lifetime innovation<ref name="rippletradejapanarchive-7691" />. The author, a supposed Yoshihiro Yoshikawa, emphasizes the value of the information being provided and urges readers to seize the opportunity before it becomes widely known<ref name="rippletradejapanarchive-7691" />. He draws parallels between the entrepreneurial spirit of Silicon Valley and the current situation, highlighting the potential for significant wealth creation<ref name="rippletradejapanarchive-7691" />. The narrative shifts to Bitcoin, its rise in value, and the recent issues with MtGox, emphasizing the volatility and risks associated with cryptocurrencies<ref name="rippletradejapanarchive-7691" />. Despite this, the author expresses confidence in the future of digital currencies and introduces Ripple (XRP) as the next potential standard<ref name="rippletradejapanarchive-7691" />. Chris Larsen, the founder of Ripple, is highlighted for his success in the financial industry, along with the support from prominent venture capital firms<ref name="rippletradejapanarchive-7691" />. The author encourages readers to register for more information about Ripple and emphasizes the importance of making informed choices in the rapidly changing landscape of digital currencies<ref name="rippletradejapanarchive-7691" />.
RTJ, established in 2014, allowed users to deposit money to obtain digital ripple credits, which could be exchanged for other currencies or redeemed for cash<ref name="tokyoreporter-7689" />.
=== Ripple Blockchain ===
"Ripple, a San Francisco-based FinTech startup developing enterprise blockchain solutions for the global banking industry, specifically in payments and remittances, sees its blockchains powered by its XRP digital token. At the time of publishing, the total market cap of XRP tokens currently stands at $8.2 billion, making it the third largest cryptocurrency after Bitcoin and Ethereum."
"Ripple, a San Francisco-based FinTech startup developing enterprise blockchain solutions for the global banking industry, specifically in payments and remittances, sees its blockchains powered by its XRP digital token. At the time of publishing, the total market cap of XRP tokens currently stands at $8.2 billion, making it the third largest cryptocurrency after Bitcoin and Ethereum."


=== Ripple Trade Japan ===
"31-year-old Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself." "RTJ was established in May of 2014 in Hamamatsu City, Shizuoka Prefecture. Users of such an exchange deposit money to obtain digital ripple credits that can be exchanged for other currencies or redeemed for cash."
"31-year-old Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself." "RTJ was established in May of 2014 in Hamamatsu City, Shizuoka Prefecture. Users of such an exchange deposit money to obtain digital ripple credits that can be exchanged for other currencies or redeemed for cash."


"The cryptocurrency exchange, which was set up by Takenaka in Hamamatsu, Shizuoka Prefecture, in May 2014, began showing signs of distress less than a year later, ignoring customer inquiries and halting withdrawals. Prior to the exchange owner’s disappearance, he had been collecting money and exchanging it for IOUs needed for Ripple online transactions. Users were then able to exchange these IOU notes for Ripple or convert them back into fiat. Takenaka is believe to have issued fake IOUs worth a total value of around 120 million Japanese Yen ($1.06 million USD)."
"The cryptocurrency exchange, which was set up by Takenaka in Hamamatsu, Shizuoka Prefecture, in May 2014, began showing signs of distress less than a year later, ignoring customer inquiries and halting withdrawals. Prior to the exchange owner’s disappearance, he had been collecting money and exchanging it for IOUs needed for Ripple online transactions. Users were then able to exchange these IOU notes for Ripple or convert them back into fiat."


"[I]nvestigations into the case have uncovered the sloppy fund management that existed at the firm." "Tokyo police also suspect that Takenaka manipulated his company’s systems for personal profit to issue over ¥120 million ($1 million) in IOUs between November 2014 and February 2015. He is alleged to have exchanged some of them with IOUs of other Ripple exchanges before converting them to cash used for personal expenditure and investment at a time when the exchange was already out of money."
== The Reality ==
"Takenaka is believe to have issued fake IOUs worth a total value of around 120 million Japanese Yen ($1.06 million USD)."


"Come March 2015, the façade broke when users were unable to withdraw their deposits and the RTJ’s website shut down soon after." "The matter came to light in March of 2015 after customers of RTJ claiming that they were unable to withdraw their deposits began consulting with police." "[U]sers were unable to withdraw cash or contact him."
"Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself, and investigations into the case have uncovered the sloppy fund management that existed at the firm."


"[Takenaka] was arrested on Oct. 18 on suspicion of fraud, misappropriated users' deposits to invest in foreign exchange margin trading, investigative sources have told the Mainichi Shimbun." "The police will search Takenaka’s home and other places in Hamamatsu."
"[I]nvestigations into the case have uncovered the sloppy fund management that existed at the firm." "Tokyo police also suspect that Takenaka manipulated his company’s systems for personal profit to issue over ¥120 million ($1 million) in IOUs between November 2014 and February 2015. He is alleged to have exchanged some of them with IOUs of other Ripple exchanges before converting them to cash used for personal expenditure and investment at a time when the exchange was already out of money."
 
"The manager and operator of Japanese Ripple exchange Ripple Trade Japan [was] arrested for allegedly defrauding a customer for ¥1.4 million ($12,470) with potentially further charges pending."
 
"The arrested 31-year-old suspect, Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself, and investigations into the case have uncovered the sloppy fund management that existed at the firm." "According to the police, Takenaka has admitted to most of the charges."
 
"The news of Takenaka’s arrest brought a degree of online confusion, with some believing the arrest was directly related to the cryptocurrency and the company Ripple itself. There is, however, no evidence to suggest this other than the fact that the exchange owner was running a Ripple server, which anyone can personally do."
 
This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.
 
The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.
 
Include:
 
* Known history of when and how the service was started.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.
 
Don't Include:
* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
* Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.
 
== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:


* When the service was actually started (if different than the "official story").
Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015<ref name="tokyoreporter-7689" />. It is believed that Takenaka redeemed the credits for cash on other exchanges and spent the funds on entertainment<ref name="tokyoreporter-7689" />.
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.


== What Happened ==
== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
The platform continued to operate until March 2015, when the website shut down and customers found that they were unable to withdraw their deposits.
{| class="wikitable"
{| class="wikitable"
|+Key Event Timeline - Ripple Trade Japan Fraud
|+Key Event Timeline - Ripple Trade Japan Fraud
Line 59: Line 34:
!Event
!Event
!Description
!Description
|-
|May 2014
|Ripple Trade Japan Established
|The Ripple Trade Japan platform is established.
|-
|January 7th, 2015 6:46:53 AM MST
|Capture Of Homepage
|The Ripple Trade Japan homepage is captured<ref name="rippletradejapanarchive-7691" />.
|-
|-
|March 3rd, 2015
|March 3rd, 2015
|Main Event
|Withdrawals Stop
|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
|The Ripple Trade Japan platform goes offline and withdrawals stop being possible.
|-
|October 18th, 2015
|Takenaka Arrested
|Ripple Trade Japan operator Takenaka is arrested for fraud.
|-
|-
|
|April 11th, 2017 2:11:33 AM MDT
|
|Brand Name Phishing Attack
|
|There is reportedly a fraud continuing on the Ripple Trade Japan website at the same URL<ref name="xrpchat-7690" />.
|-
|October 18th, 2017 10:57:16 PM MDT
|Tokyo Reporter Reports Arrest
|The Tokyo Reporter reports that the Tokyo Metropolitan Police have arrested Yuki Takenaka, the 31-year-old head of Ripple Trade Japan (RTJ), on suspicion of fraud involving the virtual currency ripple<ref name="tokyoreporter-7689" />. Over a span of a month, Takenaka is suspected of defrauding more than 40 customers nationwide out of approximately 17 million yen using similar methods<ref name="tokyoreporter-7689" />. Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015<ref name="tokyoreporter-7689" />. It is believed that he redeemed the credits for cash on other exchanges and spent the funds on entertainment<ref name="tokyoreporter-7689" />. The fraudulent activities came to light in March 2015 when customers of RTJ reported difficulties in withdrawing their deposits and consulted with the police<ref name="tokyoreporter-7689" />. Takenaka, a resident of Kyoto, has generally admitted to the allegations, according to the police<ref name="tokyoreporter-7689" />.
|}
|}
== Technical Details ==
RTJ, established in 2014, allowed users to deposit money to obtain digital ripple credits, which could be exchanged for other currencies or redeemed for cash<ref name="tokyoreporter-7689" />.


== Total Amount Lost ==
== Total Amount Lost ==
Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015<ref name="tokyoreporter-7689" />. Over a span of a month, Takenaka is suspected of defrauding more than 40 customers nationwide out of approximately 17 million yen using similar methods<ref name="tokyoreporter-7689" />. Takenaka allegedly received 1.4 million yen from a single customer despite knowing that his exchange was essentially bankrupt<ref name="tokyoreporter-7689" />.
The total amount lost has been estimated at $1,000,000 USD.
The total amount lost has been estimated at $1,000,000 USD.


How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
== Immediate Reactions ==
The fraudulent activities came to light in March 2015 when customers of RTJ reported difficulties in withdrawing their deposits and consulted with the police<ref name="tokyoreporter-7689" />.


== Immediate Reactions ==
"Come March 2015, the façade broke when users were unable to withdraw their deposits and the RTJ’s website shut down soon after." "The matter came to light in March of 2015 after customers of RTJ claiming that they were unable to withdraw their deposits began consulting with police." "[U]sers were unable to withdraw cash or contact him."
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?


== Ultimate Outcome ==
== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
The platform operator was arrested for fraud on October 18th.
 
=== Takenaka Arrested For Fraud ===
In October 2017, the Tokyo Metropolitan Police arrested Yuki Takenaka, the 31-year-old head of Ripple Trade Japan (RTJ), on suspicion of fraud involving the virtual currency ripple<ref name="tokyoreporter-7689" />. Takenaka, a resident of Kyoto, has generally admitted to the allegations, according to the police<ref name="tokyoreporter-7689" />.
 
"[Takenaka] was arrested on Oct. 18 on suspicion of fraud, misappropriated users' deposits to invest in foreign exchange margin trading, investigative sources have told the Mainichi Shimbun." "The police will search Takenaka’s home and other places in Hamamatsu."
 
"The manager and operator of Japanese Ripple exchange Ripple Trade Japan [was] arrested for allegedly defrauding a customer for ¥1.4 million ($12,470) with potentially further charges pending."
 
"According to the police, Takenaka has admitted to most of the charges."
 
=== Cryptocurrency Community Confusion ===
"The news of Takenaka’s arrest brought a degree of online confusion, with some believing the arrest was directly related to the cryptocurrency and the company Ripple itself. There is, however, no evidence to suggest this other than the fact that the exchange owner was running a Ripple server, which anyone can personally do."


== Total Amount Recovered ==
== Total Amount Recovered ==
Line 105: Line 113:


== References ==
== References ==
<references><ref name="mainichi-7680">[https://mainichi.jp/english/articles/20171019/p2a/00m/0na/013000c Arrested cryptocurrency business operator misappropriated, invested users' deposits - The Mainichi] (Mar 26, 2022)</ref>
<references>
 
<ref name="mainichi-7680">[https://mainichi.jp/english/articles/20171019/p2a/00m/0na/013000c Arrested cryptocurrency business operator misappropriated, invested users' deposits - The Mainichi] (Mar 26, 2022)</ref>
<ref name="mainichi-7681">[https://mainichi.jp/english/articles/20171018/p2a/00m/0na/009000c Head of ripple cryptocurrency exchange arrested in Japan - The Mainichi] (May 7, 2022)</ref>
<ref name="mainichi-7681">[https://mainichi.jp/english/articles/20171018/p2a/00m/0na/009000c Head of ripple cryptocurrency exchange arrested in Japan - The Mainichi] (May 7, 2022)</ref>
<ref name="bitcoinist-7682">[https://bitcoinist.com/japanese-cryptocurrency-exchange-manager-arrested-for-ripple-fraud/ Japanese Cryptocurrency Exchange Manager Arrested For Ripple Fraud | Bitcoinist.com] (May 8, 2022)</ref>
<ref name="bitcoinist-7682">[https://bitcoinist.com/japanese-cryptocurrency-exchange-manager-arrested-for-ripple-fraud/ Japanese Cryptocurrency Exchange Manager Arrested For Ripple Fraud | Bitcoinist.com] (May 8, 2022)</ref>
 
<ref name="ccn-7683">https://www.ccn.com/japanese-police-arrest-ripple-exchange-operator-fraud/ (May 8, 2022)</ref>
<ref name="ccn-7683">[https://www.ccn.com/japanese-police-arrest-ripple-exchange-operator-fraud/ https://www.ccn.com/japanese-police-arrest-ripple-exchange-operator-fraud/] (May 8, 2022)</ref>
 
<ref name="japantimes-7684">[https://www.japantimes.co.jp/news/2017/10/18/national/crime-legal/manager-ripple-cryptocurrency-exchange-arrested-scam/ Manager of Ripple cryptocurrency exchange arrested for scam | The Japan Times] (May 8, 2022)</ref>
<ref name="japantimes-7684">[https://www.japantimes.co.jp/news/2017/10/18/national/crime-legal/manager-ripple-cryptocurrency-exchange-arrested-scam/ Manager of Ripple cryptocurrency exchange arrested for scam | The Japan Times] (May 8, 2022)</ref>
<ref name="haydentifftwitter-7685">[https://twitter.com/haydentiff/status/920974372533342208 @haydentiff Twitter] (May 8, 2022)</ref>
<ref name="haydentifftwitter-7685">[https://twitter.com/haydentiff/status/920974372533342208 @haydentiff Twitter] (May 8, 2022)</ref>
 
<ref name="epfl-7686">https://www.epfl.ch/labs/dedis/wp-content/uploads/2020/01/report-2019-1-Etienne-Caquot.pdf (May 8, 2022)</ref>
<ref name="epfl-7686">[https://www.epfl.ch/labs/dedis/wp-content/uploads/2020/01/report-2019-1-Etienne-Caquot.pdf https://www.epfl.ch/labs/dedis/wp-content/uploads/2020/01/report-2019-1-Etienne-Caquot.pdf] (May 8, 2022)</ref>
 
<ref name="ethereumworldnews-7687">[https://ethereumworldnews.com/ripple-exchange-lead-head-arrested-swindling-tokyo/ Ripple Exchange 'Lead Head' Arrested for Swindling - Tokyo - Ethereum World News] (May 8, 2022)</ref>
<ref name="ethereumworldnews-7687">[https://ethereumworldnews.com/ripple-exchange-lead-head-arrested-swindling-tokyo/ Ripple Exchange 'Lead Head' Arrested for Swindling - Tokyo - Ethereum World News] (May 8, 2022)</ref>
 
<ref name="xrpchat-7688">https://www.xrpchat.com/topic/10889-japanese-exchange-manager-arrested-for-fraud/ (May 8, 2022)</ref>
<ref name="xrpchat-7688">[https://www.xrpchat.com/topic/10889-japanese-exchange-manager-arrested-for-fraud/ https://www.xrpchat.com/topic/10889-japanese-exchange-manager-arrested-for-fraud/] (May 8, 2022)</ref>
<ref name="tokyoreporter-7689">[https://www.tokyoreporter.com/japan-news/breaking/tokyo-police-bust-head-of-virtual-currency-exchange-on-suspicion-of-fraud/ Tokyo police bust head of virtual currency exchange on suspicion of fraud - Tokyo Reporter] (May 8, 2022)</ref>
 
<ref name="xrpchat-7690">[https://www.xrpchat.com/topic/3790-japan-brand-name-used-for-phishing-attack/ <SOLVED> Japan : brand name used for phishing attack - XRPChat] (May 8, 2022)</ref>
<ref name="tokyoreporter-7689">[https://www.tokyoreporter.com/japan-news/breaking/tokyo-police-bust-head-of-virtual-currency-exchange-on-suspicion-of-fraud/ Tokyo police bust head of virtual currency exchange on suspicion of fraud] (May 8, 2022)</ref>
<ref name="rippletradejapanarchive-7691">[https://web.archive.org/web/20150107134653/http://www.ripple-trade-japan.com/ Ripple Trade Japan Homepage Archive January 7th, 2015 6:46:53 AM MST] (May 8, 2022)</ref>
 
</references>
<ref name="xrpchat-7690">[https://www.xrpchat.com/topic/3790-japan-brand-name-used-for-phishing-attack/ https://www.xrpchat.com/topic/3790-japan-brand-name-used-for-phishing-attack/] (May 8, 2022)</ref>
 
<ref name="rippletradejapanarchive-7691">[https://web.archive.org/web/20150107134653/http://www.ripple-trade-japan.com/ https://web.archive.org/web/20150107134653/http://www.ripple-trade-japan.com/] (May 8, 2022)</ref></references>

Revision as of 14:44, 4 March 2024

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Ripple Trade Japan

The Ripple Trade Japan platform was run a single individual in Tokyo. The service launched in 2014, and by March of 2015 there was no response to requests for withdrawals. Roughly $1m USD was pocketed by the CEO. While he has been arrested, it does not appear that funds were recovered as they'd already been spent.

This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.[1][2][3][4][5][6][7][8][9][10]

About Ripple Trade Japan

The Ripple Trade Japan website presented an opportunity to potentially turn ¥10,000 into ¥100 million, presenting it as a once-in-a-lifetime innovation[11]. The author, a supposed Yoshihiro Yoshikawa, emphasizes the value of the information being provided and urges readers to seize the opportunity before it becomes widely known[11]. He draws parallels between the entrepreneurial spirit of Silicon Valley and the current situation, highlighting the potential for significant wealth creation[11]. The narrative shifts to Bitcoin, its rise in value, and the recent issues with MtGox, emphasizing the volatility and risks associated with cryptocurrencies[11]. Despite this, the author expresses confidence in the future of digital currencies and introduces Ripple (XRP) as the next potential standard[11]. Chris Larsen, the founder of Ripple, is highlighted for his success in the financial industry, along with the support from prominent venture capital firms[11]. The author encourages readers to register for more information about Ripple and emphasizes the importance of making informed choices in the rapidly changing landscape of digital currencies[11].

RTJ, established in 2014, allowed users to deposit money to obtain digital ripple credits, which could be exchanged for other currencies or redeemed for cash[10].

Ripple Blockchain

"Ripple, a San Francisco-based FinTech startup developing enterprise blockchain solutions for the global banking industry, specifically in payments and remittances, sees its blockchains powered by its XRP digital token. At the time of publishing, the total market cap of XRP tokens currently stands at $8.2 billion, making it the third largest cryptocurrency after Bitcoin and Ethereum."

Ripple Trade Japan

"31-year-old Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself." "RTJ was established in May of 2014 in Hamamatsu City, Shizuoka Prefecture. Users of such an exchange deposit money to obtain digital ripple credits that can be exchanged for other currencies or redeemed for cash."

"The cryptocurrency exchange, which was set up by Takenaka in Hamamatsu, Shizuoka Prefecture, in May 2014, began showing signs of distress less than a year later, ignoring customer inquiries and halting withdrawals. Prior to the exchange owner’s disappearance, he had been collecting money and exchanging it for IOUs needed for Ripple online transactions. Users were then able to exchange these IOU notes for Ripple or convert them back into fiat."

The Reality

"Takenaka is believe to have issued fake IOUs worth a total value of around 120 million Japanese Yen ($1.06 million USD)."

"Yuki Takenaka, a resident of Kyoto's Yamashina Ward, ran the company behind the exchange, Ripple Trade Japan (RTJ), by himself, and investigations into the case have uncovered the sloppy fund management that existed at the firm."

"[I]nvestigations into the case have uncovered the sloppy fund management that existed at the firm." "Tokyo police also suspect that Takenaka manipulated his company’s systems for personal profit to issue over ¥120 million ($1 million) in IOUs between November 2014 and February 2015. He is alleged to have exchanged some of them with IOUs of other Ripple exchanges before converting them to cash used for personal expenditure and investment at a time when the exchange was already out of money."

Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015[10]. It is believed that Takenaka redeemed the credits for cash on other exchanges and spent the funds on entertainment[10].

What Happened

The platform continued to operate until March 2015, when the website shut down and customers found that they were unable to withdraw their deposits.

Key Event Timeline - Ripple Trade Japan Fraud
Date Event Description
May 2014 Ripple Trade Japan Established The Ripple Trade Japan platform is established.
January 7th, 2015 6:46:53 AM MST Capture Of Homepage The Ripple Trade Japan homepage is captured[11].
March 3rd, 2015 Withdrawals Stop The Ripple Trade Japan platform goes offline and withdrawals stop being possible.
October 18th, 2015 Takenaka Arrested Ripple Trade Japan operator Takenaka is arrested for fraud.
April 11th, 2017 2:11:33 AM MDT Brand Name Phishing Attack There is reportedly a fraud continuing on the Ripple Trade Japan website at the same URL[12].
October 18th, 2017 10:57:16 PM MDT Tokyo Reporter Reports Arrest The Tokyo Reporter reports that the Tokyo Metropolitan Police have arrested Yuki Takenaka, the 31-year-old head of Ripple Trade Japan (RTJ), on suspicion of fraud involving the virtual currency ripple[10]. Over a span of a month, Takenaka is suspected of defrauding more than 40 customers nationwide out of approximately 17 million yen using similar methods[10]. Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015[10]. It is believed that he redeemed the credits for cash on other exchanges and spent the funds on entertainment[10]. The fraudulent activities came to light in March 2015 when customers of RTJ reported difficulties in withdrawing their deposits and consulted with the police[10]. Takenaka, a resident of Kyoto, has generally admitted to the allegations, according to the police[10].

Technical Details

RTJ, established in 2014, allowed users to deposit money to obtain digital ripple credits, which could be exchanged for other currencies or redeemed for cash[10].

Total Amount Lost

Takenaka is accused of fraudulently obtaining 120 million yen worth of credits through the exchange between November 2014 and February 2015[10]. Over a span of a month, Takenaka is suspected of defrauding more than 40 customers nationwide out of approximately 17 million yen using similar methods[10]. Takenaka allegedly received 1.4 million yen from a single customer despite knowing that his exchange was essentially bankrupt[10].

The total amount lost has been estimated at $1,000,000 USD.

Immediate Reactions

The fraudulent activities came to light in March 2015 when customers of RTJ reported difficulties in withdrawing their deposits and consulted with the police[10].

"Come March 2015, the façade broke when users were unable to withdraw their deposits and the RTJ’s website shut down soon after." "The matter came to light in March of 2015 after customers of RTJ claiming that they were unable to withdraw their deposits began consulting with police." "[U]sers were unable to withdraw cash or contact him."

Ultimate Outcome

The platform operator was arrested for fraud on October 18th.

Takenaka Arrested For Fraud

In October 2017, the Tokyo Metropolitan Police arrested Yuki Takenaka, the 31-year-old head of Ripple Trade Japan (RTJ), on suspicion of fraud involving the virtual currency ripple[10]. Takenaka, a resident of Kyoto, has generally admitted to the allegations, according to the police[10].

"[Takenaka] was arrested on Oct. 18 on suspicion of fraud, misappropriated users' deposits to invest in foreign exchange margin trading, investigative sources have told the Mainichi Shimbun." "The police will search Takenaka’s home and other places in Hamamatsu."

"The manager and operator of Japanese Ripple exchange Ripple Trade Japan [was] arrested for allegedly defrauding a customer for ¥1.4 million ($12,470) with potentially further charges pending."

"According to the police, Takenaka has admitted to most of the charges."

Cryptocurrency Community Confusion

"The news of Takenaka’s arrest brought a degree of online confusion, with some believing the arrest was directly related to the cryptocurrency and the company Ripple itself. There is, however, no evidence to suggest this other than the fact that the exchange owner was running a Ripple server, which anyone can personally do."

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Funds stored in a multi-signature wallet makes it impossible for one individual to pocket without the signatures of the others. Background checks and security training can further improve the security and prevent such situations.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.

References

  1. ↑ Arrested cryptocurrency business operator misappropriated, invested users' deposits - The Mainichi (Mar 26, 2022)
  2. ↑ Head of ripple cryptocurrency exchange arrested in Japan - The Mainichi (May 7, 2022)
  3. ↑ Japanese Cryptocurrency Exchange Manager Arrested For Ripple Fraud | Bitcoinist.com (May 8, 2022)
  4. ↑ https://www.ccn.com/japanese-police-arrest-ripple-exchange-operator-fraud/ (May 8, 2022)
  5. ↑ Manager of Ripple cryptocurrency exchange arrested for scam | The Japan Times (May 8, 2022)
  6. ↑ @haydentiff Twitter (May 8, 2022)
  7. ↑ https://www.epfl.ch/labs/dedis/wp-content/uploads/2020/01/report-2019-1-Etienne-Caquot.pdf (May 8, 2022)
  8. ↑ Ripple Exchange 'Lead Head' Arrested for Swindling - Tokyo - Ethereum World News (May 8, 2022)
  9. ↑ https://www.xrpchat.com/topic/10889-japanese-exchange-manager-arrested-for-fraud/ (May 8, 2022)
  10. ↑ 10.00 10.01 10.02 10.03 10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13 10.14 10.15 10.16 Tokyo police bust head of virtual currency exchange on suspicion of fraud - Tokyo Reporter (May 8, 2022)
  11. ↑ 11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 Ripple Trade Japan Homepage Archive January 7th, 2015 6:46:53 AM MST (May 8, 2022)
  12. ↑ <SOLVED> Japan : brand name used for phishing attack - XRPChat (May 8, 2022)
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