Ownership of the Zksync.jp registrant is linked to a Chinese national in Hong Kong with close ties to Amarvel; the domain’s Japanese association helped lend legitimacy and enable money laundering, per Chainalysis and TRM Labs cited by Nikkei.

The report situates this case within broader patterns of crypto-enabled illicit finance, noting that many Chinese drug-precursor manufacturers use crypto and that authorities have been slow to track crypto-linked drug money.

A Nikkei investigation ties a Chinese fentanyl-precursor export network to a Japan-based cryptocurrency scam, where a fake token named zksync.jp impersonated the zkSync project to defraud investors and launder funds through sanctioned entities.

The same group conducted more than 120 cryptocurrency transactions with entities sanctioned by the U.S. Treasury’s OFAC, suggesting a broader money-laundering network moving proceeds from drug trafficking and crypto fraud.

Authorities and regulators are expected to tighten domain registrations and crypto-transaction rules, with a focus on blockchain analytics to trace illicit funds across borders.

The central company is Hubei Amarvel Biotech from Wuhan, with its Japanese front Firsky in Nagoya, which handled logistics and money management for Amarvel before Firsky was liquidated in mid-2024.

Investors should verify the authenticity of crypto projects, especially when unfamiliar domain-like extensions are involved, to avoid impersonation and fraud.

Two Amarvel executives were convicted in Manhattan in February 2025 for conspiring to import fentanyl precursors into the United States.

The case highlights the convergence of drug trafficking and cryptocurrency crime, exposing gaps in domain security and the ease of impersonating legitimate projects, and it calls for stronger international cooperation to track illicit financial flows.

The forged token was designed to resemble zkSync but had no affiliation with the real project, leveraging a renowned blockchain name to lure investors.

Analysts traced fund movements from wallet addresses, noting suspicious activity beginning in late 2022 after Firsky moved to Nagoya; the 2023 Zksync.jp token served to impersonate a legitimate payment service and mislead users.

Japan is pursuing tighter crypto market regulation, including classifying crypto as financial instruments and potential ETF approvals by 2028, alongside enhanced cross-border enforcement cooperation between U.S. and Japanese authorities.