Key Highlights
A Nikkei investigation found that a Chinese network tied to fentanyl precursor smuggling ran a crypto fraud from Japan using a fake token called "zksync.jp," borrowing the name of the legitimate Ethereum scaling network ZKsync to deceive victims, with losses in the hundreds of millions of yen.
Wuhan-based Hubei Amarvel Biotech is at the center of the network — two of its executives were convicted in Manhattan federal court in February 2025 for conspiring to import fentanyl precursors into the US — and a Nagoya company called Firsky served as the Japan hub where Chinese national Xia Fengzhi managed logistics and funds.
Chainalysis traced over 120 crypto transactions between the network and US-sanctioned entities as evidence of money laundering, telling Nikkei that Japanese domains were deliberately chosen because they carry international credibility useful as cover for fraud.
A Chinese criminal network linked to fentanyl precursor smuggling ran a crypto fraud out of Japan using a counterfeit token designed to impersonate ZKsync, the Ethereum Layer 2 network built by Matter Labs, according to a Nikkei investigation. The fraudulent token was issued under the name "zksync.jp" and distributed to victims, with losses reaching hundreds of millions of yen. ZKsync and Matter Labs have no connection to the scheme; the name was adopted specifically to make the token appear legitimate to people unfamiliar with how to verify token authenticity on-chain.
Wuhan-based Hubei Amarvel Biotech sits at the center of the network. Two of its executives were convicted at a Manhattan federal court in February 2025 on charges of conspiring to import fentanyl precursors into the United States. The Japan-based operational arm ran through a Nagoya-registered company called Firsky, where Chinese national Xia Fengzhi directed logistics and money management. The structure — chemical smuggling infrastructure layered with a crypto fraud operation — reflects a documented pattern of criminal organizations using digital assets to move money across jurisdictions where traditional financial monitoring is harder to apply.
Blockchain forensics firm Chainalysis told Nikkei it traced more than 120 crypto transactions between wallets connected to the network and entities on US sanctions lists, which the outlet flagged as evidence of money laundering. Chainalysis also noted that the use of Japanese-registered domains was intentional: Japanese addresses carry a level of credibility and perceived legitimacy that criminal networks exploit to make fraudulent services appear trustworthy to targets overseas. The case adds to a growing body of documented overlap between drug trafficking and crypto fraud, where the same organizational structure handles both cash flows and token-based schemes simultaneously.
