By Tian Qin, Vision Times
A Chinese organization previously accused of illegally exporting fentanyl precursor chemicals may have used a base in Japan to facilitate cryptocurrency-related fraud operations, according to a June 22 investigation by Nikkei Asia.
The investigation centers on Hubei Jing’ao Biotechnology Co., Ltd., a mainland Chinese company that investigators say maintained operations in Nagoya, Japan, and conducted transactions with cryptocurrency accounts linked to fraud networks with ties to China.
According to the report, those networks promoted a fraudulent digital token known as “zksync.jp,” using a Japanese internet domain to imitate legitimate payment and blockchain services. Investigators say the project was designed to lure users and investors into transferring funds under false pretenses. Losses linked to the scheme are estimated to have reached hundreds of millions of yen, including in Japan.
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Following the money
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Blockchain intelligence firm Chainalysis reportedly reviewed aspects of the operation and noted that the use of a Japanese domain name fit a common money-laundering pattern. Because Japanese web domains are often viewed as trustworthy internationally, they can help fraudulent projects appear more legitimate and reduce suspicion among potential victims.
The investigation identified a Nagoya-based company known as Firsky as a key operating entity linked to Hubei Jing’ao Biotechnology’s activities in Japan. A figure referred to as the group’s “Japan boss” allegedly oversaw local logistics and financial operations.
Though Corporate records show Firsky was formally dissolved in July 2024, investigators reportedly traced cryptocurrency wallet addresses disclosed in U.S. court documents and found extensive financial interactions between Hubei Jing’ao Biotechnology and multiple Chinese entities and individuals sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
Particular attention was drawn to transactions involving the Wuhan Yuancheng Group, a company long targeted by U.S. authorities for its alleged role in supplying fentanyl-related chemicals.
The U.S. government has described Wuhan Yuancheng founder Ye Quanfan as one of the world’s most prolific producers of fentanyl-related substances. The U.S. State Department previously offered a reward of up to $5 million for information leading to his arrest or conviction.
According to the Nikkei investigation, Hubei Jing’ao Biotechnology conducted more than 120 transactions with accounts connected to sanctioned entities associated with the Yuancheng network. Investigators also noted that many of the individuals involved originated from the same region in China, suggesting close personal and business ties.
Concerns over illicit finance
TRM Labs, a U.S.-based blockchain intelligence company that reviewed aspects of the investigation, said Japan’s geographic proximity to China, open financial system, and high volume of cross-border trade make it vulnerable to exploitation by transnational criminal organizations.
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The firm’s analysts noted that countries with large volumes of international commerce can become attractive locations for moving and disguising illicit proceeds as legitimate business activity. The findings have also renewed attention on Japan’s growing role in efforts to combat fentanyl trafficking.
Meanwhile, a senior official with the U.S. Drug Enforcement Administration (DEA) warned that Japan has become an important transit point for fentanyl-related shipments. The official noted that commercial cargo bound for the U.S. faces less scrutiny than shipments originating from other jurisdictions, making Japan an attractive transshipment hub for precursor chemicals produced in China and India. According to the agent, the DEA reportedly knew about the laced shipments but made no attempts to halt them.
In response to those concerns, the DEA and the Japan Coast Guard signed a memorandum of cooperation in May aimed at strengthening efforts against drug trafficking, including fentanyl-related smuggling operations.
The United Nations Office on Drugs and Crime (UNODC) has also increased its focus on the growing challenge posed by synthetic drugs and the international networks that support their production and distribution.
