Key Points
- The FBI arrested a dark web narcotics marketplace owner, Rui-Siang Lin, after tracing illicit crypto transactions.
- Lin, known as “Pharoah” online, operated the ‘Incognito Market,’ a $100 million platform for illegal narcotics, powered by cryptocurrencies.
Rui-Siang Lin, a 23-year-old resident of Taiwan, was arrested by the Federal Bureau of Investigation (FBI) for managing a dark web narcotics marketplace.
The arrest came after the FBI tracked illegal cryptocurrency transfers.
The Dark Web Marketplace
Lin, known on the internet as “Pharoah,” was apprehended at the John F. Kennedy Airport in New York on May 18.
The ‘Incognito Market’ he ran for about four years generated personal profits in the millions, according to James Smith, the FBI Assistant Director in Charge.
The illicit marketplace, an onion-based e-commerce platform, was one of the largest of its kind.
Users could access it via the Tor web browser, which enables anonymous internet browsing by rerouting traffic through a network of servers.
Cryptocurrency and the Dark Web
The platform accepted cryptocurrencies such as Bitcoin and Monero, allowing users to purchase drugs like LSD, MDMA, and prescription amphetamines like Adderall.
The FBI was able to trace the transactions made on the platform to Lin, thanks to the marketplace’s promotion of cryptocurrencies and several undercover operations.
The transactions were made to a centralized crypto exchange account registered by Lin.
Four Bitcoin transfers from Lin’s wallet were directed towards a service to convert it 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, an email account, and a phone number from the exchange, leading to his arrest.
The account grew from holding $63,000 in 2021 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 associated with a Namecheap account, a domain hosting platform.
Funds from Lin’s wallet were used to buy a domain promoting the dark web marketplace.
Lin also had accounts at crypto exchanges Binance and Kraken, which the FBI has now seized.
The U.S. Department of Justice (DOJ) shut down the marketplace in March 2024.
Lin faces charges of engaging in a continuing criminal enterprise, narcotics conspiracy, money laundering, and a conspiracy charge to sell adulterated and misbranded medication.
Earlier this month, the FBI also exposed a $43 million Ponzi scheme marketed as a crypto investment scheme promising substantial returns.
