Key takeaways:
- Authorities claim to have monitored crypto payments that revealed the identity of a man who was detained in New York and charged with making money from a dark web drug market.
- Rui-Siang Lin faced charges of money laundering, participating in a criminal business, and conspiring to distribute counterfeit medications.
Authorities claim to have monitored crypto payments that revealed the genuine identity of a 23-year-old man who was detained in New York and charged with owning, operating, and making money from a $100 million dark web drug market.
The Manhattan United States Attorney’s Office released a statement on May 20, stating that Rui-Siang Lin, also known online as “Pharoah,” was taken into custody at New York’s John F. Kennedy Airport on May 18 and made an appearance in federal court the following Monday. James Smith, Assistant Director of the FBI, said:
“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,”
The Tor web browser was required to access Incognito Market, an onion-based e-commerce network sometimes known as the “dark web” or “dark net.” It lets users utilize Bitcoin and Monero as payment methods to buy and sell drugs like cocaine, LSD, MDMA, and prescription amphetamines like Adderall.
The Department of Justice (DoJ) said that the marketplace required vendors and customers to use its crypto services to keep 5% of each transaction and provide an escrow service.
The DoJ announced that the marketplace had shut down in March of this year, which was in line with an earlier exit fraud that involved the purported theft of millions of dollars worth of BTC and XMR from customers.
Lin faced charges of money laundering, participating in a criminal business, and conspiring to distribute counterfeit medications.
Lin is charged with criminal enterprise, which carries a mandatory life sentence if found guilty. The maximum punishment for the drug conspiracy charge is life in prison. According to a DoJ announcement, crypto kept in Lin’s Kraken and Binance accounts has been forfeited.
By tracking Incognito Market crypto payments to an anonymous centralized crypto exchange account registered in Lin’s name, the FBI was able to locate Lin and establish his claimed connections to the dark web website.
FBI task force officer Mark Rubens stated in a deposition that money from Incognito Market’s wallet was transferred to a crypto wallet under Lin’s control and subsequently deposited into an exchange account under Lin’s name.
In Rubens’ report, the FBI allegedly traced at least four transfers that showed Lin’s crypto wallet moving BTC obtained from the Incognito Market to a “swapping service” to convert it for XMR. The XMR was subsequently placed into an account on a crypto exchange that the FBI claimed to be Lin’s.
Reubens said that the exchange gave the FBI access to Lin’s phone number, email address, and the Taiwanese driver’s license used to open the account.
The FBI asserted that it had connected the phone number and email to a Namecheap account that purchased a domain for a website promoting Incognito Market with money purportedly taken from Lin’s crypto wallet.
According to the deposition, deposits to Lin’s crypto exchange account increased while using Incognito Market, rising from over $63,000 in 2021 to approximately $4.2 million in 2023. During the same period, transfers to an unidentified second exchange account totaled $4.5 million between July and November of last year.
