Photo/IllutrationA cash receipt that a woman was given in exchange for handing over 6.09 million yen ($53,421) to con artists for the purchase of Bitcoins. Part of the image is modified for privacy. (Chihaya Inagaki)

Tokyo police on Nov. 14 arrested eight men in connection with a pyramid scheme that apparently collected about 7.8 billion yen ($68.42 million) in cryptocurrency from 6,000 people.

The men are suspected of violating the Financial Instruments and Exchange Law by not registering their business operations with authorities, according to Tokyo’s Metropolitan Police Department.

Police believe that the suspects tried to avoid prosecution through the use of cryptocurrencies, as transactions in this area fall in a gray zone under the financial exchange law.

Among those arrested were Kazunari Shibata, a 46-year-old company executive in Tokyo’s Minato Ward, and seven other men, police said.

Six of the suspects, including Shibata, basically admitted to the allegations, while the other two did not.

The men have been accused of soliciting investments from nine men and women ranging in age from 40 to 72 for what they called “Sener,” which they claimed is a U.S. investment firm, between February and May last year without registering with the Financial Services Agency.

The nine people together handed 29 million yen in cash to Shibata and other men to purchase Bitcoins, a cryptocurrency, on their behalf, police said.

In all, Tokyo police believe the suspects collected about 500 million yen in cash, in addition to the cryptocurrency, from about 6,000 people in 44 prefectures.

According to a group of lawyers representing victims and investors, the suspects at seminars and other gatherings promised monthly returns of 3 to 20 percent, based on the investment.

They also promised investors further returns and payments if they brought in other investors.

Their seminars included foreign speakers, and a video of at least one of the sessions was uploaded on YouTube.

They collected most of the investments in the form of Bitcoins. The cash they received was given on the pretext to purchase Bitcoins.

According to the FSA, cryptocurrencies, in principle, are not included in securities that are under the jurisdiction of the Financial Instruments and Exchange Law.

An agency official said investments via cryptocurrencies can be regulated under the law, depending on the structure of the investment.

But there is no clear definition of the scope of regulations.

A group of 73 victims filed a lawsuit against those who solicited their investments at the Tokyo District Court late last month, seeking about 370 million yen in damages.