FBI Tracks Cryptocurrency Transfers, Dismantles Dark Web Marketplace Worth $100 Million

The owner of a dark web narcotics marketplace has been arrested by the Federal Bureau of Investigation (FBI) following the tracking of illegal cryptocurrency transfers. Rui-Siang Lin, a 23-year-old resident of Taiwan, has been found guilty of operating a dark web narcotics marketplace worth $100 million. Going by the alias “Pharoah” online, Lin was apprehended on May 18 at John F. Kennedy Airport in New York. According to FBI Assistant Director in Charge James Smith, Lin operated the ‘Incognito Market’ for approximately four years and profited millions of dollars personally. The illicit platform, which was one of the largest of its kind, was an onion-based e-commerce platform accessible through the Tor web browser. This browser enables users to anonymously access the dark web by routing their internet traffic through a network of servers. The platform utilized cryptocurrencies like Bitcoin and Monero, allowing users to purchase various drugs such as LSD, MDMA, and prescription amphetamines like Adderall. The arrest was made possible due to the marketplace’s encouragement of cryptocurrency use, offering discounts and escrow services. With the assistance of other law enforcement agencies and undercover operations, the FBI was able to trace the transactions made on the platform back to Lin. These transactions were directed to an unnamed centralized cryptocurrency exchange account that had been KYC (know your customer) verified by Lin. At least four Bitcoin transfers originating from Lin’s wallet were traced by authorities to a “swapping service” that converted them to XMR, a privacy-focused cryptocurrency. The XMR was then deposited into a crypto exchange account operated by Lin. The FBI obtained Lin’s driving license, email account, and phone number from the exchange, leading to his arrest. The account, which had only contained $63,000 in 2021, grew to nearly $4.2 million by 2023. Another exchange account linked to the case saw $4.5 million deposited between July and November 2023. The phone number was connected to a Namecheap account, a domain hosting platform. Funds from Lin’s wallet were utilized to purchase a domain that promoted the dark web marketplace. Lin also held accounts at cryptocurrency exchanges Binance and Kraken, both of which have been seized by the FBI. The U.S. Department of Justice (DOJ) has reported that the marketplace was shut down in March 2024. Lin has been charged with one count of engaging in a continuing criminal enterprise, which carries a mandatory minimum life sentence. He also faces one count of narcotics conspiracy, with a minimum sentence of 10 years and a maximum sentence of life in prison. Additionally, Lin is charged with money laundering and conspiracy to sell adulterated and misbranded medication, with a maximum sentence of five years. In a separate incident, the FBI recently uncovered a $43 million Ponzi scheme that was promoted as a cryptocurrency investment offering high returns. Various cryptocurrency scams in October alone cost users over $32 million.