Incidences of trouble associated with crypto assets have been increasing, with the National Consumer Affairs Center of Japan saying complaints linked to virtual currencies are on pace to reach a record high.
The center said it had been called for consultation 856 times between April and July 6, putting it on pace to approach the record high of 3,455 in fiscal 2018.
Particularly alarming are cases in which funds invested overseas have not been returned. In South Korea, a group of about 100 Japanese have filed a criminal complaint against a crypto-asset operator this spring, claiming it has not returned invested funds.
A 47-year-old woman in Hino, Tokyo, who invested in crypto assets through the South Korean firm, said disappointedly, "I was attracted by the profits, and I didn't give enough thought to the risks. At the very least, I'd like to get my initial investment back."
In August 2019, the crypto asset business of the firm was introduced on the blog of a well-known investor using such catch-phrases as "principal guaranteed," "rewards for referrals" and "increase assets through games." Attracted by the high returns, the woman bought additional crypto assets.
In order to gain a referral reward, the woman brought in her husband, 52, a company employee, and her father, 73, for a total investment of about 3 million yen. By playing games with the dedicated app on her smartphone, her account showed earnings of about 300,000 yen in one month.
About four months later, she tried to withdraw about 7.6 million yen, which included profits. A notice stating "remittance procedures completed" appeared on her smartphone screen, but no actual payment was made. When she emailed the firm, it replied that it would look into the matter, but after a while, it stopped contacting her.
A search on the internet revealed to her that there were many Japanese who had similarly not received funds. Between March and April this year, about 100 Japanese including the woman banded together to file a criminal complaint with South Korea police through a South Korean lawyer, accusing company executives and others of fraud and other charges over the failure to return crypto assets valued at over 400 million yen at the time.
According to the National Consumer Affairs Center of Japan, there have been numerous cases in which people who invested in crypto assets through overseas operators have been unable to make withdrawals. In one case, the person was lured into investing by a person of the opposite sex they had met on a dating app, who said, "I want money so we can live together, so go ahead and invest."
In April this year, the Financial Services Agency, the Consumer Affairs Agency and the National Police Agency issued a warning to investors, citing cases in which people who had invested in crypto assets after being solicited by unregistered operators, including overseas ones, lost contact with them.
"Investors need to consider the risks sufficiently and deal with operators registered in Japan," said an official who handles such matters at the National Consumer Affairs Center.
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