FBI Uses Crypto Transactions to Bust $100M Dark Web Market

Taiwanese national Rui-Siang Lin, 23, was found guilty of operating a $100 million dark web drug business. On May 18, Lin, also going by the online handle “Pharoah,” was captured at John F. Kennedy Airport in New York. James Smith, the Assistant Director in Charge of the FBI, claims that Lin ran the “Incognito Market” for over four years, earning “millions of dollars in personal profits.”

Anonymous internet browsing was possible with the help of the Tor browser, which allowed access to the Incognito Market, a prominent dark web marketplace. The site facilitated the sale of various drugs like LSD, MDMA, and prescription amphetamines such as Adderall, utilizing cryptocurrencies like Bitcoin and Monero for transactions. Users were enticed to transact with cryptocurrencies by discounts and escrow services, which made it hard to track down.

Law enforcement agencies, including the FBI, used undercover operations to track transactions back to Lin. They discovered that Lin had KYC-verified accounts at a centralized crypto exchange. Authorities traced multiple Bitcoin transfers from Lin’s wallet to a “swapping service” to convert them to Monero (XMR), a privacy-centric cryptocurrency. The XMR was then deposited into a crypto exchange account under Lin’s control.

Evidence and Arrest

The investigation revealed Lin’s identity through his driving license, email account, and phone number linked to the exchange. The funds in Lin’s account surged from $63,000 in 2021 to nearly $4.2 million by 2023. Another linked account saw deposits of $4.5 million between July and November 2023.

Authorities also traced Lin’s phone number to a Namecheap account, which he used to buy a domain promoting the dark web marketplace. The FBI has since seized Lin’s accounts at crypto exchanges Binance and Kraken.

The U.S. Department of Justice (DOJ) announced the shutdown of the marketplace in March 2024. Lin faces severe charges, including 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 of life in prison. Additionally, Lin is charged with money laundering and conspiracy to sell adulterated and misbranded medication, with a potential maximum sentence of five years.