A Chinese fentanyl network suspected of exporting drug precursors to America conducted cryptocurrency fraud in Japan through a fraudulent token called zksync.jp, according to a Nikkei investigation. The group used a cover company in Japan named Firsky, which was linked to Chinese chemical manufacturer Hubei Amarvel Biotech—two of whose executives were convicted in the U.S. last year for ties to Chinese drug lords. The scam defrauded victims of hundreds of millions of yen by exploiting Japan's .jp domain prestige and mimicking an existing payments system. The activity may have served to launder money from fentanyl-related sales, as Amarvel frequently conducted cryptocurrency transfers with Chinese financial fraud groups.
Nikkei Investigation Links Firsky and Amarvel to Zksync.jp Fraud
The Nikkei investigation found that the criminal group issued the fraudulent zksync.jp token, using the similarity of this domain with an existing payments system to attract unsuspecting investors. Firsky, the cover company in Japan, was identified as the parent entity of Hubei Amarvel Biotech. The losses reported by victims amounted to hundreds of millions of yen.
![Infographic explaining Japan's ZKSYNC fentanyl ties]()
Amarvel Tied to Wuhan Yuangcheng, U.S. Offers $5M Reward
Over 120 cryptocurrency transfers were detected between Amarvel and Chinese financial fraud groups, tying the organization to Wuhan Yuangcheng. The leader of Wuhan Yuangcheng has been designated by the U.S. Department of State as "one of the most prolific suppliers of anabolic steroids in the world," and the department stated he also exported fentanyl precursors to the U.S. The U.S. Department of State offers a reward of up to $5 million for information leading to his capture.
DEA Official States Japan Serves as Drug Transshipment Area
David King, special agent in charge of the DEA's Asia-Pacific division, stated that Japan serves as a transshipment area for drug-trafficking organizations. According to King, these organizations take advantage of the lax scrutiny of commercial shipments to America compared to that of Chinese shipments.
FAQ
What is the zksync.jp scam uncovered by Nikkei?
The zksync.jp scam was a fraudulent cryptocurrency token issued by a Chinese fentanyl network operating through a cover company in Japan called Firsky. The scam exploited Japan's .jp domain prestige and mimicked an existing payments system to defraud investors of hundreds of millions of yen.
Who is connected to Hubei Amarvel Biotech in this case?
Hubei Amarvel Biotech is linked to Firsky, the cover company used in Japan. Two executives of Amarvel were convicted in the U.S. last year for ties to Chinese drug lords. The company is also tied to Wuhan Yuangcheng through over 120 detected cryptocurrency transfers with Chinese financial fraud groups.
Why does the U.S. offer a $5 million reward related to this network?
The U.S. Department of State offers a reward of up to $5 million for information leading to the capture of the leader of Wuhan Yuangcheng, who has been designated as one of the most prolific suppliers of anabolic steroids in the world and has exported fentanyl precursors to the U.S.
