02 Nov 2022 · 2 min read

Alleged Japanese Scam Operators Paid up to 3,000 ‘Investors’ in a ‘Worthless’ Cryptoasset

Source: Shisu Ka/Adobe
Source: Shisu Ka/Adobe

A group of Japanese lawyers has alleged that 3,000 people may have been duped in an apparent Ponzi scheme allegedly hatched by a firm that pledged to pay investors in a “worthless” cryptoasset.

Per the Nagasaki Newspaper, the allegations center around a Tokyo-based firm named VISION. A team of volunteer lawyers from the Nagasaki Bar Association announced they were representing several victims. The team claimed that the firm and its associates tricked victims into paying for “USB devices.”

The lawyers explained that these devices, victims were told, would be “rented” to both Japanese and overseas customers. They were pre-loaded with a range of popular apps, the company allegedly said. Would-be “investors” were told that they could expect to receive regular payouts as customers then “rented” the “devices.”

But when cash payouts became increasingly rare, the company allegedly issued its investors with a “cryptoasset” whose name can be transliterated as “V Cash coin.” This coin turned out to be worthless, the lawyers claimed: It was not listed on any major crypto exchange and could not be exchanged for cash.

The seven-lawyer team claimed that at least seven people in Nagasaki had suffered combined losses of over $1 million. But, they added, thousands more in the area were also likely affected.

‘Scam’ Operators Known to Police

The media outlets reported that VISION was last year served with a two-year business suspension order for violations of the Specified Commercial Transactions Act. The act, per a Japanese government website “prohibits the misrepresentation of prices or payment conditions, or intentional failure to disclose them, and prohibits solicitation by using intimidation to overwhelm a consumer.”

The act is intended to block unsolicited “door-to-door” trading and Ponzi-type business models.

But, the lawyers claimed, VISION continued to pursue “investors” via “affiliate companies” – in spite of the order.

One of the lawyers, Kazunari Imai, was quoted as stating:

“Customers have suffered large-scale losses. We want to return money to as many people as possible."

The team added that it would be hold a briefing session for victims later this month.

Crypto-related fraud cases continue to rise in Japan. Last month, two men in their thirties said they were tricked by chat app-based fraudsters who ran a fake crypto exchange.

Also last month, police in the Gunma Prefecture reported the arrest of an 18-year-old alleged crypto scammer. The teen was held on suspicion of attempting to trick a man almost three times his age out of over $17,000.