Crypto Trail Exposes Dark Web Drug Marketplace, Resulting in Owner’s Arrest

The FBI tracked Rui-Siang Lin, a 23-year-old alleged to control a notorious dark web marketplace. This development marks a significant breakthrough in combating cyber-enabled drug distribution.

Lin, who reportedly oversaw a multimillion-dollar operation, was traced and captured through meticulous analysis of crypto transactions linked to drug sales.

How FBI Tracked Incognito Market Owner

Initiated in October 2020, Incognito Market quickly rose to infamy, facilitating over $100 million in illicit drug transactions until its closure in March 2024. Operating under the pseudonym “Pharoah,” Lin orchestrated all aspects of the operation.

His platform allegedly sold dangerous narcotics, including heroin, cocaine, and counterfeit pills.

The unraveling of Lin’s empire began when the FBI detected crypto transfers from Incognito Market to a centralized exchange. FBI task force officer Mark Rubens explained how Lin’s wallet received funds from the Incognito Market.

Lin used to convert the funds from Bitcoin (BTC) to Monero (XMR) through a swapping service, enhancing their anonymity. These funds were subsequently deposited into a centralized exchange account under Lin’s name.

“Documents from the centralized exchange indicate that its user provided a mobile number, email address, and a Taiwanese Driver’s License as proof of identity. The Taiwanese Driver’s License lists an address in Taipei, Taiwan, and the name is “林睿庠,” which is the Mandarin language spelling of Rui-Siang Lin,” Rubens wrote.

Read more: Anonymity vs. Pseudonymity: Understanding the Key Differences

Lin’s Driver’s License. Source: Court Document

Incognito Market mimicked legitimate e-commerce platforms, complete with customer service, branding, and a vendor registration system. Vendors paid a 5% commission on their sales, generating revenue that supported the site’s operations and Lin’s profits.

Court documents reveal that as Incognito Market grew, so did the deposits into Lin’s accounts, escalating from about $63,000 in 2021 to nearly $4.2 million by 2023.

The dangers of Lin’s operation were highlighted during undercover investigations, where drugs sold as safe medications turned out to be deadly. For instance, pills purported to be oxycodone were actually fentanyl, significantly increasing the risk to public health.

The US authorities arrested Lin at John F. Kennedy Airport on May 18, 2024, effectively ending his illegal activities. He now faces multiple charges, including engaging in a criminal enterprise and conspiracy to sell adulterated medication, with potential penalties ranging from 10 years to lifetime in prison.

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“As alleged, Rui-Siang Lin’s brazen operation resulted in the illicit sale of over $100 million in narcotics, including those that were mislabeled and later found to include deadly fentanyl.  The El Dorado Task Force’s Darkweb and Cryptocurrency Task Force leverages cutting-edge techniques to target even the Internet’s most savvy criminals,” HSI Special Agent Ivan J. Arvelo said. 

Indeed, Lin’s arrest is part of a larger trend in the fight against crypto-facilitated crimes. Last week, the Department of Justice arrested two brothers who allegedly conducted a $25 million theft on the Ethereum blockchain.

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