A Japanese manager of an exchange for the Ripple cryptocurrency was arrested Wednesday for allegedly swindling ¥1.4 million ($12,470) from a depositor, police said.

It is the first arrest in Japan made in connection with a bourse of the Ripple virtual currency issued by a U.S. venture company, which is officially called XRP, according to investigators.

Yuki Takenaka, the 31-year-old founder and head of a company operating the Ripple exchange, is suspected of defrauding the male depositor in Miyagi Prefecture of the ¥1.4 million in March 2015. He allegedly collected the money even though his firm was in a state of collapse and unable to make refunds at that time.

Takenaka, a Kyoto resident, has admitted to most of the charges, according to the police.

The currency exchange was set up by Takenaka in Hamamatsu, Shizuoka Prefecture, in May 2014, but users were unable to withdraw cash or contact him around March the following year.

His company collected money from its users in exchange for IOUs, or written acknowledgements of debt, needed for Ripple online transactions. Users could exchange the notes with Ripple or convert them into cash.

According to investigative sources, Takenaka allegedly swindled more than ¥10 million out of a dozen users by advertising that his company charges no commission.

He is also suspected of issuing fictitious IOUs worth around ¥120 million and making profits. The police will search Takenaka’s home and other places in Hamamatsu.

As of Monday, Ripple’s market capitalization stood at more than ¥1 trillion following bitcoin at over ¥10 trillion and Ethereum at over ¥3 trillion.

The Ripple currency is usually used for international payments and cannot be used for merchandise purchases. It has been traded online mainly for speculation purposes.