Japan Makes First Bitcoin-Related Drug Arrest

A Japanese drug importer has been arrested after allegedly purchasing narcotics from his Mexican drug runners. The kicker? He apparently bought the drugs via Bitcoin.

Ayumu Teramoto, 38, was arrested by a combined police force from Tokyo and the southwestern city of Fukuoka under suspicion of buying a “stimulant drug” from abroad using bitcoin, making this the first case of someone getting arrested for carrying out a drug transaction with the digital currency.

The details of the investigation are so far scarse. The term “stimulant drug” is a blanket term, but often describes narcotics like methamphetamine or cocaine. Teramato allegedly used bitcoin to buy 50 grams (~2 oz.) of said stimulant drug, worth almost $35,000. Police say the package arrived to Narita Airport not far from Tokyo hidden inside a tablet computer.

Police have yet to explain how they knew Teramoto used bitcoin to purchase the drugs, only confirming he had used an online service to import the narcotics via the United States and was arrested on Wednesday.

The drug bust is likely to be enough ammunition for bitcoin opponents both in Japan and abroad. Just this week Shinsei Bank Ltd., a major Japanese bank, revealed they have been refusing international money transfer requests from customers looking to buy or sell Bitcoin.

A spokesperson of the bank told the Wall Street Journal “The decision, which has been effective since February, is based on our comprehensive judgment as a bank. We have not determined yet whether we will lift the ban in the future.” The spokesperson did not explain why the bank made the anti-bitcoin stance.

The ban from Shinsei, the only major bank in Japan who has taken such action on digital currencies, is only on international transfers and not domestic ones. This is done in part because bankers are required to know precisely the reason of the international transfer, while no questions are asked on domestic transfers.

Tack on the collapse of Tokyo-based bitcoin exchange Mt Gox, where some 650,000 bitcoins went missing and the Silk Road drug market, a memory all still fresh in the minds of anyone following digital currencies, and the spotlight on Bitcoin becomes even more tainted to the mass media. Nice going, Mr. Teramoto.