A Chinese network previously linked to the supply of fentanyl precursor chemicals was also connected to a cryptocurrency fraud scheme that operated through Japan, according to an investigation by Nikkei.
The report alleges that the group used Japanese internet domains and a fake token branded as “Zksync.jp” to lure crypto investors worldwide. The token appeared to imitate ZKsync, the Ethereum Layer 2 network developed by Matter Labs, although there is no indication that the legitimate project was involved in the scheme.
Nikkei reported that investor losses reached hundreds of millions of yen, exceeding $1 million.
Investigation exposes fake token used to target crypto investors
According to the investigation, the fraudulent operation relied on a token carrying the “Zksync.jp” name, which closely resembled the branding of the well-known ZKsync ecosystem.
Using a Japanese domain helped the project appear more trustworthy to potential victims. Japan’s domain registration rules generally require a local address, giving the platform an added layer of credibility.
Blockchain analytics firm Chainalysis told Nikkei that fraud operators often use domains associated with trusted jurisdictions to attract users and make fake investment opportunities appear legitimate.
How did the investigation focus on Amarvel and its Japanese connections?
Nikkei identified Hubei Amarvel Biotech, a Wuhan-based chemical company, as a central figure in the broader network.
The report also pointed to a Nagoya-based company, Firsky, which allegedly acted as a Japanese front connected to the operation. A Chinese national identified as Xia Fengzhi was reportedly linked to logistics activities and fund movements involving the Japan-based entity.
Firsky was liquidated in July 2024, while Xia’s current whereabouts remain unknown. The findings come after two Amarvel Biotech executives were convicted in the United States for conspiracy-related offenses involving a fentanyl precursor chemical and money laundering.
What did the blockchain records reveal about sanctioned connections?
Using wallet addresses referenced in U.S. court filings, Nikkei traced cryptocurrency transactions tied to Amarvel and its Japan-linked network.
The investigation found more than 120 crypto transactions involving entities that are under U.S. sanctions. The transaction activity was reportedly concentrated around parties linked to Wuhan Yuancheng Group, an organization previously cited in U.S. enforcement actions connected to alleged drug trafficking operations.
Meanwhile, Japan’s parliament is preparing to pass a new bill that will bring cryptocurrencies under the same regulatory framework as stocks. The legislation classifies crypto assets as financial instruments and introduces stricter trading rules, as well as lower taxes.
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