China · Japan · Ethereum · The Block
Fentanyl-linked Chinese network tied to crypto fraud from Japan involving fake ‘Zksync.jp’ token: Nikkei
Compiled by KHAO Editorial — aggregated from 1 source. See llms.txt for citation guidance.
★ Tier-1 Source
A Chinese organization suspected of illegally exporting fentanyl precursor chemicals also was linked to a large-scale cryptocurrency fraud through a base in Japan, according to an investigation by Nikkei published Sunday.
Key facts
- Chainalysis has separately traced $5.5 million in stablecoins from Latin American cartels to Chinese fentanyl producers, and earlier estimated that wallets linked to suspected chemical shops took
- Total losses, including victims in Japan, ran into the hundreds of millions of yen, or upward of $1 million, Nikkei said
- The name appears to borrow from ZKsync, a legitimate Ethereum Layer 2 network built by Matter Labs that has no apparent connection to the alleged fraud
- Yuancheng is led by Chuen Fat Yip, a Chinese national the U.S. accuses of running a transnational drug operation across mainland China and Hong Kong
Summary
The criminal group allegedly used Japanese internet domains to defraud crypto users and moved funds through accounts tied to entities under U.S. sanctions, the report said, in what Nikkei described as evidence of a broader money-laundering operation. Amarvel's Japanese front, a Nagoya company called Firsky, served as an operational hub where a figure Nikkei previously identified as Chinese national Xia Fengzhi, the "boss in Japan," directed logistics and money management. Using wallet addresses disclosed in U.S. court evidence, Nikkei built an analytical program to map how Amarvel moved funds. The blockchain trails connected the network to Chinese financial-fraud groups, per the report.