A Chinese network suspected of exporting fentanyl precursor chemicals was also linked to a large crypto fraud operated through Japan, according to a Nikkei investigation.
Summary
- Nikkei tied a fentanyl-linked Chinese network to Japan-based crypto fraud using a fake Zksync.jp token.
- The alleged scheme used Japanese domains to gain trust and deceive crypto users worldwide online.
- Blockchain trails reportedly showed more than 120 transactions involving U.S.-sanctioned entities linked to drug networks.
The report said the group used Japanese internet domains and a fake “Zksync.jp” token to deceive crypto users worldwide.
Nikkei said losses reached hundreds of millions of yen, or more than $1 million. The token name appeared to copy ZKsync, a legitimate Ethereum Layer 2 network built by Matter Labs. There is no apparent connection between ZKsync and the alleged fraud.
Japan base tied to Amarvel network
The report placed Hubei Amarvel Biotech, a Wuhan-based chemical company, at the center of the network. In 2025, two Amarvel executives were cleared of a top fentanyl charge but convicted of conspiring to import a fentanyl precursor chemical and conspiring to launder money.
Nikkei said a Nagoya-based company called Firsky served as a Japanese front for the network. The report identified a Chinese national, Xia Fengzhi, as a person linked to logistics and funds from Japan. Firsky was liquidated in July 2024, and Xia’s current location remains unknown.
Blockchain trails point to sanctioned entities
Using wallet addresses disclosed in U.S. court evidence, Nikkei mapped fund flows tied to Amarvel and its Japan-linked base. The report said more than 120 crypto transactions connected the network to entities under U.S. sanctions. It described the pattern as evidence of money laundering, though the findings remain based on on-chain tracing and court-linked data.
Those transactions were reportedly clustered around parties linked to Wuhan Yuancheng Group. The group has been tied in U.S. actions to Chuen Fat Yip, a Chinese national accused by U.S. authorities of leading a transnational drug operation. The State Department has offered a $5 million reward for information leading to his arrest.
Japanese domains gave the scam credibility
The alleged “Zksync.jp” token used a Japanese domain suffix, which normally requires a registrant with a Japanese address. Nikkei said the domain registrant appeared to be a Chinese national in Hong Kong with close financial links to Amarvel.
Chainalysis told Nikkei that Japanese domains can make fraud sites appear more credible to users abroad. This fits a wider pattern in which criminal groups use trusted jurisdictions, familiar project names and blockchain transfers to move funds across borders.
Crypto crime scrutiny grows in Japan
The case comes as Japan works to expand its regulated crypto market. As previously reported by crypto.news, Japan’s lower house passed a bill to reclassify crypto under the Financial Instruments and Exchange Act, while a linked tax plan targets a 20% rate in 2028.
The timing creates a difficult backdrop for regulators. Japan is trying to attract regulated crypto activity, but Nikkei’s findings show how criminal networks can also use Japanese infrastructure to create trust. The DEA also signed a memorandum with the Japan Coast Guard in May to strengthen enforcement against fentanyl smuggling.
TRM Labs has reported that 97% of 120 Chinese precursor manufacturers it studied accepted crypto, while wallets linked to those manufacturers received more than $26 million in 2023. The Nikkei case adds a Japan-linked fraud layer to that wider use of crypto in synthetic drug supply chains.
