A manager on a Ripple Exchange has swindled $ 12,470
The Ripple cryptocurrency exchange in Hamamatsu, Shizuoka Prefecture, was raided by police as they approached the exchange manager who was looking to earn ¥ 1.4 million ($ 12,470) from one of his clients ‘ money.
Yuki Takenaka, the 31-year-old founder and head of a company that operates the Ripple exchange, collected his stolen funds even though his company was in a state of collapse and unable to make refunds at the time.
It is the first arrest in Japan made in connection with an exchange of the virtual currency Ripple, as Takenaka has admitted to most charges, according to police.
Having established the exchange in May 2014, Takenaka quickly fell out of favor as users were unable to withdraw cash or contact him.
In a strange business model, his company raised money from its users in exchange for IOU, or written acknowledgements of debt, needed for Ripple’s online transactions. Users can exchange the notes with Ripple or convert them into cash.
But it has also been discovered that Takenaka allegedly swindled more than ¥ 10 million from a dozen users through fake advertising that his company does not charge any commission.
In addition, there are investigations into the alleged issuance of fictitious IOU amounting to approximately ¥ 120 million.
Ripple’s drive for legitimacy
Ripple, as a cryptocurrency, is slightly different from others, as they seek to become a legitimate digital currency for use within the banking sector; and they pride themselves on being centralized.
Ripple currency is usually used for international payments and cannot be used for purchases of goods.
Ripple is looking to enter the banking market with its tough regulations, and while this incident has nothing to do with Ripple as a currency, it shows once again that the crypto market remains a wild west for many and there is very little protection for individuals.