A Chinese network suspected of exporting fentanyl precursor chemicals has been linked to a large crypto fraud scheme operated through Japan, according to an investigation by Nikkei.
The alleged scam used Japanese domains to gain trust and deceive crypto users worldwide online. The group created a fake 'Zksync.jp' token, which appeared to copy the legitimate Ethereum Layer 2 network ZKsync built by Matter Labs.
Nikkei's investigation found that more than 120 transactions involving U.S.-sanctioned entities linked to drug networks were connected to the alleged scheme. These transactions were reportedly clustered around parties tied to Wuhan Yuancheng Group, which has been linked to Chuen Fat Yip, a Chinese national accused of leading a transnational drug operation.
The State Department has offered a $5 million reward for information leading to Yip's arrest. The alleged 'Zksync.jp' token used a Japanese domain suffix, which normally requires a registrant with a Japanese address. However, the domain registrant appeared to be a Chinese national in Hong Kong with close financial links to Amarvel.