Key Takeaways
Nikkei found that a zksync.jp scam stole hundreds of millions of yen, linking Japan’s crypto fraud to drug markets.With over 120 transfers found, Hubei Amarvel Biotech next faces scrutiny over illicit drug market ties.The U.S. offers $5M for a Wuhan Yuangcheng leader, as the DEA next targets Japan’s transit markets.
Chinese Fentanyl Network Linked To Crypto Fraud Token in Japan
Drug trafficking networks are being increasingly linked to cryptocurrency fraud, even as a side activity to complement their main illegal activities.
Local reports indicate that a criminal group that allegedly exported fentanyl precursors from China to America was also involved in cryptocurrency fraud in Japan involving numerous victims.
According to a Nikkei investigation, the group issued a fraudulent token called zksync.jp, using Japan’s internet domain prestige and the similarity of this domain with an existing payments system as a hook to get unsuspecting users to invest in its platform.
The group used a cover company, identified as Firsky, in Japan, that was linked to the Chinese chemical manufacturer Hubei Amarvel Biotech, whose two executives were convicted in the U.S. last year due to its close ties with Chinese drug lords.
The losses reported by the victims amounted to hundreds of millions of yen, or millions of dollars.
The activity could have been used to launder money coming from fentanyl related sales, as Amarvel, which was the parent company of Firsky, frequently conducted cryptocurrency transfers with Chinese financial fraud groups.
Over 120 of these transfers were detected, tying the organization with Wuhan Yuangcheng, a group whose leader has been designated by the U.S. Department of State as “one of the most prolific suppliers of anabolic steroids in the world,” who also has exported fentanyl precursors to the U.S. The department offers a reward of up to $5 million for information leading to his capture.
Japan serves as a transshipment area for drug-trafficking organizations that take advantage of the lax scrutiny of commercial shipments to America compared to that of Chinese shipments, according to David King, special agent in charge of the DEA’s Asia-Pacific division.
