Japan Makes First Arrest Over Alleged Drug Trafficking Using Bitcoin

A Japanese man has been arrested for allegedly importing class A drugs using bitcoin, in a case thought to be the first of its kind in the country.

The suspect, named Ayumu Teramoto, allegedly used bitcoin to pay his Mexican suppliers for a "stimulant drug", AFP reported, citing a spokesman for Tokyo Metropolitan Police.

The police did not reveal the name of the drug, but it is thought to be a class A substance such as cocaine or methamphetamine.

Teramoto reportedly used the crypto currency to buy some 50 grams of the drug, reportedly worth 3.5m yen ($34,500, £20,300). National broadcaster NHK claims the shipment was flown into Japan's Narita airport inside a tablet computer.

Teramoto was arrested on 7 May after a team effort involving police forces in Tokyo and the southwestern city of Fukuoka. NHK claims it is the first time someone had been arrested in Japan for a drug transaction that involved bitcoin.

Another blow for bitcoin

However, while Japan is new to drug crimes involving bitcoin, the US is already dealing with a number of cases.

Earlier in January, Charlie Shrem, the CEO of bitcoin exchange BitInstant, was arrested and charged with money laundering and using bitcoins to purchase drugs on the Silk Road website.

The notorious online black market Silk Road had some 30,000 bitcoins seized by US prosecutors after the website was found to be facilitating money laundering using the virtual currency.

The case in Japan is another blow for the digital currency, which has been criticised for the anonymity it affords its clients.

Critics have argued that bitcoins could be used for drug transactions, money-laundering and other illegal activities due to the opaque environment in which users operate.