Incognito

Dark

Bitcoin

Silk Road

Monero

A 23-year-old man has been arrested in New York and charged with owning, running and profiting from a $100 million dark web narcotics marketplace after authorities claimed to have tracked crypto transfers that uncovered his real identity.
Rui-Siang Lin, known online as “Pharoah,” was arrested at New York’s John F. Kennedy Airport on May 18 and appeared in federal court on Monday, May 20, the Manhattan&nbsp;United States Attorney’s Office wrote in a <a href="https://www.justice.gov/usao-sdny/pr/incognito-market-owner-arrested-operating-one-largest-illegal-narcotics-marketplaces" target="_blank" rel="noopener nofollow">statement</a>.
“For nearly four years, Rui-Siang Lin allegedly operated ‘Incognito Market,’ one of the largest online platforms for narcotics sales, conducting $100 million in illicit narcotics transactions and reaping millions of dollars in personal profits,” added FBI Assistant Director in Charge James Smith.
Incognito Market was an onion-based e-commerce platform accessed using the Tor web browser — referred to as the “dark web” or “dark net.”
It allowed users to buy and sell drugs including cocaine, LSD, MDMA and prescription amphetamines such as Adderall using Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) and Monero (<a href="https://cointelegraph.com/xmr-price-index">XMR</a>) as payment methods.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-05/5ec7167b-ab36-4340-b685-a96e7b9b2c7d.png">
 <figcaption style="text-align: center;">
 A screenshot of various illicit and prescription drugs for sale on Incognito Market. Source: Incognito Market
 </figcaption>
</figure>
The marketplace demanded buyers and vendors use its own crypto services so it could skim 5% of every purchase and offer an escrow service, the Justice Department alleged.
The DOJ noted that the marketplace had closed in March this year, coinciding with a previously reported&nbsp;<a href="https://cointelegraph.com/news/bitcoin-monero-reportedly-stolen-darknet-market-exit-scam">exit scam</a> that allegedly stole millions of dollars worth of customer’s BTC and XMR.
Lin was <a href="https://www.justice.gov/usao-sdny/media/1352551/dl" target="_blank" rel="noopener nofollow">charged</a> with engaging in a criminal enterprise, narcotics conspiracy, conspiracy to sell misbranded medication and money laundering.
If convicted, Lin faces a mandatory life sentence on the criminal enterprise charge. The narcotics conspiracy charge carries a maximum life sentence.
The Justice Department has issued a forfeiture for crypto held in Lin’s Binance and Kraken accounts.
<h2 id="fbi-traced-crypto-transfers">FBI traced crypto transfers</h2>
The FBI found Lin and alleged his ties to the dark web site partly by tracing Incognito Market crypto transfers to an unnamed centralized crypto exchange account in Lin’s name.
In a <a href="https://www.justice.gov/usao-sdny/media/1352546/dl" target="_blank" rel="noopener nofollow">deposition</a>, FBI task force officer Mark Rubens said a crypto wallet controlled by Lin received funds from Incognito Market’s wallet which was then sent to an exchange account in Lin’s name.
Rubens outlined at least four transfers the FBI traced allegedly showing Lin’s crypto wallet sending Incognito Market-derived BTC to a “swapping service” to exchange it for XMR — which was then deposited into a crypto exchange account the FBI claimed is Lin’s.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-05/d2a1294a-ca65-47af-8626-6b6fcbcd01e4.png">
 <figcaption style="text-align: center;">
 Highlighted excerpt of Rubens’ deposition detailing an alleged transfer by Lin. Source: The Department of Justice
 </figcaption>
</figure>
Related: <a href="https://cointelegraph.com/news/us-authorities-take-down-73m-crypto-money-laundering-scheme">US authorities bust $73M crypto scam, make two arrests</a>
The exchange provided the FBI with Lin’s Taiwanese driver’s license used to open the account along with an email address and phone number, Reubens wrote.
The FBI claimed it tied the email and phone number to a Namecheap account which used funds from Lin’s alleged crypto wallet and account to buy a domain for a site that promoted Incognito Market.
The deposition alleged the deposits to Lin’s crypto exchange account grew with Incognito Market, from around $63,000 in 2021 to nearly $4.2 million over the course of 2023 and a second unnamed exchange account saw $4.5 million deposited between July and November last year.
Magazine: <a href="https://cointelegraph.com/magazine/3-4-billion-bitcoin-popcorn-tin-silk-road-hacker/">$3.4B of Bitcoin in a popcorn tin — The Silk Road hacker’s story</a>

Dark web market owner arrested in New York after FBI traces crypto

Table of Contents

Cointelegraph

Other articles published on May 21, 2024

$5.9 Million Marine Moguls ERC-404 Airdrop Closes in 3 Days, Launch Imminent!

Bitcoin Retraces, Ethereum, Dogecoin Continue Their Rallies: BTC 'Needs Some Time To Rest Before ...

US Spot Bitcoin ETFs Mark Sixth Consecutive Day of Net Inflows

Ethereum Price Prediction: Will ETH Price Hit New ATH By May End?

Sei Foundation Proposes High-Speed v2 Upgrade

Ether ETF Deadline: SEC Asked Nasdaq, CBOE For Spot Ethereum ETF Update Deadline

Join our free newsletter for daily crypto updates!