FBI Arrests a New York Dark Web Market Owner After Tracing Crypto

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A 23-year-old New York man, Rui-Siang Lin, has been arrested by the FBI and charged with operating and profiting from a $100 million dark web narcotics marketplace. 

Authorities used crypto transaction tracing to uncover Lin’s real identity, leading to his arrest at John F. Kennedy Airport on May 18. He appeared in federal court on May 20, according to the Manhattan United States Attorney’s Office.

FBI Arrests Dark Web Market Owner

Rui-Siang Lin, who went by the online alias “Pharoah,” allegedly ran “Incognito Market,” a prominent dark web platform for narcotics sales. 

FBI Assistant Director in Charge James Smith commented, “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.”

Incognito Market was an onion-based e-commerce platform accessible via the Tor web browser, often referred to as the “dark web” or “dark net.” It facilitated the buying and selling of various drugs, including cocaine, LSD, MDMA, and prescription amphetamines like Adderall, using the cryptocurrencies Bitcoin and Monero as payment methods. 

Marketplace Required Buyers to Use Crypto Services

The marketplace required buyers and vendors to use its proprietary crypto services, allowing it to skim 5% of every transaction and provide an escrow service. According to the Justice Department, the marketplace shut down in March this year amid reports of an exit scam that allegedly stole millions of dollars worth of Bitcoin and Monero from customers.

Lin now faces several serious charges, including engaging in a criminal enterprise, a narcotics conspiracy, a conspiracy to sell misbranded medication, and money laundering. The criminal enterprise charge alone carries a mandatory life sentence if he is convicted, while the narcotics conspiracy charge also has a maximum life sentence.

FBI Investigation into Tracing Crypto

In conjunction with these charges, the Justice Department has issued a forfeiture for cryptocurrencies held in Lin’s Binance and Kraken accounts.

The FBI’s investigation into Lin involved tracing cryptocurrency transfers linked to Incognito Market. They discovered that funds from the market’s wallet were transferred to a centralized crypto exchange account registered in Lin’s name. FBI task force officer Mark Rubens stated in a deposition that a crypto wallet controlled by Lin received funds from Incognito Market’s wallet, which were then sent to an exchange account under Lin’s name.

Linking Email and Phone Number

Rubens detailed at least four transactions that allegedly showed Lin’s crypto wallet sending Bitcoin derived from Incognito Market to a swapping service to exchange it for Monero. This Monero was subsequently deposited into a crypto exchange account purportedly belonging to Lin. The exchange provided the FBI with Lin’s Taiwanese driver’s license, email address, and phone number used to open the account.

The FBI also linked Lin’s email and phone number to a Namecheap account that used funds from his crypto wallet and account to purchase a domain promoting Incognito Market. The deposition claimed that deposits to Lin’s crypto exchange account grew with the marketplace’s success, from approximately $63,000 in 2021 to nearly $4.2 million in 2023. Another unnamed exchange account saw deposits totaling $4.5 million between July and November of last year.

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