Tokyo police have arrested the head of a Ripple exchange and trading platform for allegedly swindling an investor amid a wider investigation of a sweeping fraud. According to multiple regional reports, Tokyo police are holding 31-year-old Yuki Takenaka, the operator and manager of Ripple Trade…
Tokyo police have arrested the head of a Ripple exchange and trading platform for allegedly swindling an investor amid a wider investigation of a sweeping fraud.
According to multiple regional reports, Tokyo police are holding 31-year-old Yuki Takenaka, the operator and manager of Ripple Trade Japan – an exchange enabling trading of Ripple’s virtual currency XRP.
The individual was arrested on Wednesday for allegedly swindling ¥1.4 million ($12,500) from an investor persuaded into sending the cash into the exchange’s bank account in March 2015. Authorities allege that Takenaka took the money despite the company effectively bankrupt at the time. The cybercrime division of the Tokyo Metropolitan Police department is also investigating claims that Takenaka allegedly defrauded an additional ¥17 million ($150,000) from at least 40 customers in Japan after initially luring them with no deposit fees for trading.
Set up in May 2014, Ripple Trade Japan collected money from its users in exchange for IOUs, signed documents acknowledging debt. Users could then exchange their IOUs with each other or convert them into Ripple’s XRP tokens or cash.
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.
Come March 2015, the façade broke when users were unable to withdraw their deposits and the RTJ’s website shut down soon after.
According to the police, Takenaka has admitted to most of the charges.
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.
The case draws parallels to that of now-defunct Japanese bitcoin exchange Mt Gox, once the world’s largest bitcoin exchange. Founder and former CEO Mark Karpeles has been charged with embezzling ¥341 million in customers’ bitcoin and cash funds stored at the exchange. His trial at the Tokyo District court continues, with the disgraced bitcoin executive pleading ‘not guilty’ to the charges against him.
Featured image from Shutterstock.
Last modified: January 10, 2020 2:50 PM UTC