The 'Zksync.jp' Scam: How a Fentanyl Smuggling Ring Defrauded Crypto Investors in Japan
According to a Nikkei investigation, a Chinese criminal organization that exported fentanyl precursors to the United States was also involved in a cryptocurrency scam in Japan. The group issued a fraudulent token named ‘zksync.jp,’ leveraging the trust associated with Japan’s internet domain and similarity to a legitimate fast-payments service to lure unsuspecting investors.
The scam resulted in losses totaling hundreds of millions of yen (millions of dollars). The operation was conducted through a cover company called Firsky, which was linked to the Chinese chemical manufacturer Hubei Amarvel Biotech. Two executives of Amarvel were convicted in the U.S. last year for ties to Chinese drug lords.
Investigators detected over 120 cryptocurrency transfers between Amarvel and Chinese financial fraud groups, including Wuhan Yuangcheng. The U.S. Department of State has designated the leader of Wuhan Yuangcheng as one of the world’s most prolific suppliers of anabolic steroids and a key exporter of fentanyl precursors, offering a $5 million reward for information leading to his capture.
Japan serves as a transit point for drug trafficking organizations, taking advantage of less stringent scrutiny of commercial shipments to America compared to those from China, according to David King, special agent in charge of the DEA’s Asia-Pacific division.
This case highlights the growing intersection between drug trafficking networks and cryptocurrency fraud, as criminals use digital assets to launder money and target victims globally.