FBI Traces Crypto Transfers to Dismantle $100M Dark Web Marketplace
The Federal Bureau of Investigation (FBI) has successfully dismantled a $100 million dark web narcotics marketplace by tracking illicit cryptocurrency transfers. The operation led to the arrest of Rui-Siang Lin, a 23-year-old resident of Taiwan, who was found guilty of operating the illegal platform.
Key Details of the Operation
- Suspect: Rui-Siang Lin, also known as "Pharoah"
- Age: 23
- Nationality: Taiwanese
- Arrest Location: John F. Kennedy Airport, New York
- Date of Arrest: May 18
- Platform: Incognito Market
- Duration of Operation: Approximately four years
- Profits: Millions of dollars in personal gains
Platform and Operations
The Incognito Market was an onion-based e-commerce platform accessible via the Tor web browser, which allows users to browse the internet anonymously. The platform was primarily powered by cryptocurrencies like Bitcoin and Monero, enabling users to purchase various drugs, including LSD, MDMA, and prescription amphetamines like Adderall.
How the FBI Traced the Transactions
The FBI’s success in tracing the transactions was largely due to the marketplace’s encouragement for users to use cryptocurrencies by offering discounts and escrow services. With the help of other law enforcement agencies and several undercover operations, the FBI traced the transactions to Lin. The transactions were made to an unnamed centralized crypto exchange account that was KYC’d (Know Your Customer) by Lin.
Cryptocurrency Transfers
- Bitcoin Transfers: At least four transfers were traced from Lin’s wallet to a "swapping service" to convert Bitcoin to Monero (XMR), a privacy-focused cryptocurrency.
- Exchange Accounts: The XMR was then deposited into a crypto exchange account run by Lin. The account grew from holding $63,000 in 2021 to nearly $4.2 million by 2023. Another unnamed exchange account linked to the case saw $4.5 million deposited between July and November 2023.
Additional Evidence
The FBI secured Lin’s driving license, email account, and phone number from the exchange, leading to his arrest. The phone number was linked to a Namecheap account, a domain hosting platform. Funds from Lin’s wallet were used to purchase a domain that promoted the dark web marketplace. Lin also held accounts at crypto exchanges Binance and Kraken, which have now been seized by the FBI.
Legal Consequences
According to the U.S. Department of Justice (DOJ), the marketplace was shut down in March 2024. Lin faces multiple charges:
- Engaging in a Continuing Criminal Enterprise: Mandatory minimum sentence of life in prison
- Narcotics Conspiracy: Minimum sentence of 10 years in prison, maximum potential sentence of life in prison
- Money Laundering: Additional charges
- Conspiracy to Sell Adulterated and Misbranded Medication: Maximum sentence of five years
Related Investigations
Earlier this month, the FBI also uncovered a $43 million Ponzi scheme promoted as a crypto investment scheme offering huge returns.
