Japan-linked crypto fraud network tied to fentanyl precursor case, Nikkei finds

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Highlights

A Chinese organization linked to fentanyl precursor exports used Japanese domains and entities to run a crypto fraud network targeting global users and laundering funds via U.S.-sanctioned accounts.
Nagoya-based Firsky, a Japanese front for Hubei Amarvel Biotech whose executives were convicted in February 2025, was liquidated in July 2024 with its director's whereabouts unknown.
The Zksync.jp fraudulent token scheme issued in 2023 reportedly caused over $1 million in losses and raised pressures for Japan's April digital asset regulatory reforms.

Investigation traces Japan base and fake token scheme

Nikkei reported that a Chinese organization suspected of illegally exporting fentanyl precursor chemicals is also tied to a large-scale cryptocurrency fraud operation run through a base in Japan. The newspaper said the group used Japanese internet domains to target crypto users globally and routed funds through accounts connected to entities under U.S. sanctions, indicating a broader money-laundering network.

At the center of the case is Hubei Amarvel Biotech, a Wuhan-based chemical manufacturer. Two of its executives were convicted in a Manhattan federal court in February 2025 of conspiring to import fentanyl precursors into the U.S., while its Japanese front, a Nagoya company called Firsky, allegedly served as an operational hub; Firsky was liquidated in July 2024, and the whereabouts of its director are unknown.

Using wallet addresses disclosed in U.S. court evidence, Nikkei said it built an analytical program to trace Amarvel's fund flows. Those blockchain trails linked the network to Chinese financial-fraud groups, including a scheme involving a fraudulent token called Zksync.jp, whose name appears to borrow from the legitimate Ethereum Layer 2 network ZKsync, which is not connected to the alleged scam.

Regulatory pressure grows for Japan's crypto market

The token was issued in 2023, coinciding with Amarvel's operations, and the scheme allegedly led to losses of more than $1 million. Nikkei also tracked more than 120 transactions involving U.S.-sanctioned entities related to a Chinese national accused of running a transnational drug operation.

The findings add to concerns that Japan's financial system can be exploited to disguise illicit proceeds as legitimate assets. Against that backdrop, Japan is moving to tighten oversight of digital assets, and in April the cabinet approved a bill to reclassify crypto as financial products in an effort to strengthen regulation of the sector.

Our earlier report on the widening partisan split in U.S. crypto adoption highlighted new polling showing Republicans are now more likely than Democrats to hold, trade, or use digital assets. We noted that the gap has grown since 2021, with analysts linking the shift to Republican-leaning preferences for lighter regulation and to Donald Trump’s increasingly pro-crypto positioning.

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