FBI Arrests 23-Year-Old for Running $100M Dark Web Drug Market in NY

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A 23-year-old man has been arrested in New York, charged with operating a $100 million dark web narcotics marketplace.

Authorities claim they traced cryptocurrency transactions that led them to the suspect, Rui-Siang Lin, also known online as “Pharoah.” Lin was apprehended at John F. Kennedy Airport on May 18 and appeared in federal court on May 20, as per a statement from the Manhattan United States Attorney’s Office.

Rui-Siang Lin allegedly operated Incognito Market, a platform for narcotics sales on the dark web, for nearly four years. The site was an onion-based e-commerce platform accessible through the Tor web browser, which allows users to browse the internet anonymously. Incognito Market facilitated the sale of various drugs, including cocaine, LSD, MDMA, and prescription amphetamines such as Adderall. Transactions were conducted using cryptocurrencies like Bitcoin and Monero.

The marketplace employed its crypto services, skimming 5% from every purchase and offering an escrow service to ensure transactions’ security. The FBI estimated that Incognito Market conducted approximately $100 million in illicit transactions, generating millions in personal profits for Lin. The site ceased operations in March 2024, coinciding with an exit scam that reportedly stole millions of dollars worth of customer’s Bitcoin and Monero.

Investigation and Arrest

The FBI tracked Lin by tracing cryptocurrency transfers from the dark web market to a centralized crypto exchange account allegedly in his name. According to FBI task force officer Mark Rubens, funds from Incognito Market’s wallet were sent to a crypto wallet controlled by Lin. These funds were then transferred to an exchange account registered under Lin’s name.

Rubens detailed at least four instances where Bitcoin from Lin’s wallet was exchanged for Monero using a swapping service. The Monero was subsequently deposited into a crypto exchange account tied to Lin. The exchange provided the FBI with Lin’s Taiwanese driver’s license, email address, and phone number used to open the account. The investigation revealed that the email and phone number were linked to a Namecheap account, which used funds from Lin’s alleged crypto wallet to purchase a domain promoting Incognito Market.

Charges and Potential Sentences

Lin faces multiple charges, including engaging in a continuing criminal enterprise, which carries a mandatory life sentence if convicted. He is also charged with narcotics conspiracy, which has a maximum potential sentence of life in prison, and money laundering.

Additionally, Lin is accused of conspiracy to sell misbranded medication, with a maximum sentence of five years.

The U.S. Department of Justice (DOJ) has issued a forfeiture for the cryptocurrency held in Lin’s accounts at Binance and Kraken. The deposits to Lin’s crypto exchange accounts grew significantly over time, from around $63,000 in 2021 to nearly $4.2 million in 2023. Another account linked to Lin saw $4.5 million deposited between July and November 2023.

Ongoing Efforts and Previous Cases

This arrest is part of ongoing efforts by law enforcement agencies to combat illegal activities on the dark web. The FBI, in collaboration with other agencies, has been conducting undercover operations and utilizing advanced cyber techniques to trace and apprehend individuals involved in dark web marketplaces.

Earlier this month, the FBI uncovered a $43 million Ponzi scheme that was presented as a cryptocurrency investment scheme promising high returns.

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