Eight men in Tokyo have been arrested for running a pyramid scheme that scammed more than 6,000 people out of a total of more than 7.8 billion yen ($68.4 million). The scammers promised guaranteed returns on investments of between 3% and 20% daily based on how much they invested. In addition to this, these profits would be boosted based on how many people they referred that subsequently invested.
Violating Financial Instruments and Exchange Laws
Scammers don’t really care much for laws, and these Japanese scammers are no exception to the rule. The first mistake the group made was not registering their investment firm with the Japanese Financial Services Authority. Secondly, they promised guaranteed returns daily – a big no-no when it comes to marketing financial products. These two charges alone gave the police more than enough reason to arrest the eight men – running a pyramid scheme was simply the icing on the cake.
Similar Crimes in the US Warrant Jail Time
The US Securities and Exchange Commission (SEC) has started cracking down on crypto pyramid schemes. A similar scheme to this Japanese crypto pyramid scheme was run by GAW Miners during the early days of Bitcoin. Homero Joshua Garza – the man behind GAW Miners – was fined $9.2 million in restitution and got 21 months behind bars. If the Japanese prosecutors take the case just as seriously, there is a good chance it could be one of the biggest crypto crime related jail sentences the world has seen since Ross Ulbricht.
WestLand Storage Still Roaming Free
In an interesting twist of fate, WestLand Storage has actually become part of the crypto scene. It’s very clearly a Ponzi scheme, but people don’t seem to care, as they are earning money from it. The company promises to invest your money in real estate, which it then rents out and gives you a slice of the returns. While it’s an intriguing idea, it’s one of the biggest Ponzi schemes out there.
Is Initiative Q the Next Bit Pyramid Scheme?
Fitting the exact definition of a pyramid scheme is Initiative Q. In fact, it fits the definition almost perfectly. Initiative Q promises investors free tokens for signing up and more for each friend they refer to the platform. However, seeing as no money has ever changed hands within the “initiative”, there is nothing the SEC can do about it. This means it’s not inherently bad, but anyone interested in the project should be careful when dealing with the firm.
While these scammers from Japan have yet to receive their sentence, we are very sure that the group will see a huge amount of jail time and an enormous fine for their crimes. Scamming 40 to 72-year-olds out of hard earned money is disgusting behavior and not acceptable, so the group deserves to have the book thrown at them.
