Crypto Fraudsters Preying on Japanese Social Media & Chat App Users

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 25, 2023

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Crypto-related crime continues to rise in Japan – where a media outlet has recounted how two men in their thirties were stung by chat app-based crypto fraudsters running a bogus crypto exchange.

According to the newspaper Yomiuri, 24 cases of crypto-related fraud where the perpetrators made use of social media and chat apps have been reported in Fukuoka Prefecture thus far in 2022. The cumulative total of money lost in social media-powered fraud cases in the region has hit the $2 million mark, police explained.

The media outlet interviewed two men who said they were duped by “investors” on an investment-themed Telegram channel earlier this year. The first man, named “A” by the media outlet in order to preserve his anonymity, explained that an individual from the chat asked for his Line ID in order to continue a conversation in private.

He was later approached on Line by a woman calling herself “Angie Lee” and claiming to hail from Taiwan.

In “broken Japanese,” she attempted to persuade him to “invest in cryptoassets” using a platform she recommended.

A was initially skeptical but eventually agreed to invest a “small amount” – around $34 – on the platform. When he made unexpected “profits” of “several tens of thousands of yen” on this initial investment, A explained that his “suspicions gradually faded away.”

A continued to increase the size of his stake, eventually putting almost $9,000 into the platform on 10 separate instances. He added that he successfully withdrew fiat from the platform on two occasions.

A then introduced his friend (B), also from Fukuoka Prefecture, to Angie Lee. The latter then proceeded to invest some $36,500 on the platform over the course of eight transactions.

But in August, A came across a post on the internet that claimed the “platform” was actually a scam exchange. He contacted B to suggest that they attempt to withdraw their funds “little by little – to avoid suspicion.”

However, when they attempted to remove their funds, the platform instructed them that their transactions were “under review.”

A then attempted to register an inquiry with the platform’s “customer service center,” and was told that he would need to pay a “cancellation fee” of over $4,000 if he wanted to withdraw any of his funds.

He then took the matter up with the prefectural police but was unable to recover any of his funds.

Social Media Scammers: A ‘Familiar Pattern’ for Crypto Fraudsters

The Fukuoka Prefectural Police’s Investigative Division remarked that the case followed a similar pattern, whereby overseas-based individuals attempt to gain people’s trust on social media sites and dating apps – seeking to trick them into sending their coins to crypto wallets actually run by bogus crypto exchange operators.

Most do this by posing as attractive foreign men or women and then allowing them to “make a profit to gain their trust,” before “defrauding them out of a large sum of money.”

A was quoted as saying:

“I dropped my guard when I saw that I was making a profit. […] I didn’t know much about crypto. I didn’t even realize that my friend and I were being deceived.”

Last year, convenience store workers successfully stepped in to prevent instances of crypto fraud, while in 2018, a crypto fraudster tricked an 84-year-old woman out of $9,000.