A 30-year-old Japanese man has been arrested for allegedly opening a cryptocurrency account that he then sold to a criminal group.

Lin Xiaolin, 30, who resides in Tokyo, was arrested on the 15th March after he opened the digital currency exchange account in Japan’s capital by accessing its server in China after he used the name of a Vietnamese individual, reports the South China Morning Post.

According to police, Xiaolin then sold the cryptocurrency account to a criminal group for around 100,000 yen, or $945. He has denied the allegations.

Tokyo police state that the 30-year-old suspect is believed to have opened around six digital currency accounts, with at least three of them used for illegal transactions. Police allege that Xiaolin sent a message to a Vietnamese individual he knew on Facebook and paid 30,000 yen to purchase personal details of another Vietnamese person. These included a name, birthday, and other vital information.

He is then reported to have used the details to open the cryptocurrency account between the 6th and 9th July. Xiaolin’s arrest follows on from the arrest of four Vietnamese people in February for the selling of information needed to open a digital currency account.

At the moment, the cryptocurrency market in Japan is undergoing a major change as the country’s financial watchdog, the Financial Services Agency (FSA) cracks down on exchanges that don’t have the correct security measures in place. This follows on from the hack at Tokyo-based exchange Coincheck, which saw thieves siphoning off $530 million at the end of January, making it the biggest hack of its kind.

As the FSA investigates 16 unregistered cryptocurrency exchanges to determine if their applications should be approved, it was reported that two Japanese exchanges had quit their operations last month amid tighter operations from authorities. The two in question are Tokyo GateWay and Fukuoka-based Mr Exchange, bringing the total number to have withdrawn their applications to five in the country. The other three being Raimu, bitExpress, and Bit Station.

Featured image from Shutterstock.

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