Police in Tokyo have arrested eight individuals in connection with a BTC pyramid scheme alleged to have swindled as much as $68.4 million from its victims, according to local press reports.

According to the Asahi Shimbun report, authorities confirmed the men have been taken into custody in connection with an investment company known as ‘Sener,’ which had been running seminars led by foreign speakers.

A video footage leaked online from these seminars showed the participants were offered monthly returns ranging from 3-20% on their investment, and were expected to invite other investors into the scheme in order to maximise their returns.

The suspects are alleged to have collected funds from unsuspecting investors in cash and BTC, covering about 6,000 individual victims over the duration of the scam. As a result, a separate group lawsuit has been filed on behalf of some 73 victims seeking $3.2 million in damages.

Local media are reporting that six of those detained have admitted to their involvement in the pyramid scheme, while two remain in denial of their role in the scam.

Police have suggested that the use of BTC was an attempt to avoid legal enforcement action, given its current ‘gray zone’ status under Japanese law. Cryptocurrencies are not yet considered securities in Japan, thus they fall largely outside of the remit of regulators such as the Financial Services Agency (FSA).

The scam is only the latest of its kind to target BTC fraud, with authorities around the world actively pursuing a number of high profile cases against similar cons and scams.

Japan is regarded as a crypto-friendly jurisdiction, despite significant hacks at some of its most high profile cryptocurrency exchanges, including Zaif and Coincheck.

In October, the country’s FSA gave self-regulating status to the crypto industry, appointing industry body JVCEA to oversee self regulation within the sector. The FSA current issues licenses to crypto businesses such as exchanges seeking to operate within the jurisdiction.

The arrests show the increasingly hardline response being taken by authorities in tackling the blight of BTC scams, which remain all-too-prevalent, regardless of the ongoing weakness in BTC markets.

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