A Taiwanese national has been charged with running an underground drug marketplace known as “Incognito Market” and was arrested after authorities traced transactions on the platform.
The platform has made over $100 million in cryptocurrency transactions through the sale of illegal narcotics such as fentanyl.
Incognito Market Founder Arrested and Indicted
On May 18, U.S. authorities arrested 23-year-old Lui Xiang Lin, who was operating under the alias “Pharaoh,” at New York's John F. Kennedy Airport. FBI Deputy Director James Smith said Lin ran Incognito Market for about four years and was in charge of operations, including vendors, employees and customers, and was the key decision maker.
During this time, Lin raked in millions of dollars in personal profits and grew Incognito Market into one of the largest online drug sales platforms. The platform used Monero and Bitcoin to facilitate the buying and selling of drugs such as Adderall, MDMA, LSD, and prescription amphetamines like cocaine. In exchange, Lin received 5% of sales each time a user funneled funds through the platform.
Lin faces charges including one count of money laundering, one count of engaging in a continuing criminal enterprise, one count of narcotics conspiracy and one count of conspiracy to sell falsely branded and adulterated drugs.
According to the FBI, they identified the owner of Incognito Market by tracing cryptocurrency from the marketplace to an exchange account in his name. FBI Special Agent Mark Rubens said the exchange provided Lin's driver's license, email and phone number.
U.S. Attorney Damien Williams said during Lin's court appearance on Monday that the so-called “dark web” is not a sanctuary for individuals seeking to conduct illegal activities.
Lin faces life in prison
Incognito Market ceased operations in March after an exit scam left users unable to access their funds, after which administrators reportedly began demanding that vendors pay them fees ranging from $100 to $20,000 depending on size to prevent customer data from being made public.
Despite these allegations, Lin, a crypto developer and self-described Monero enthusiast, revealed on X that he conducted a four-day workshop on cybercrime and cryptocurrencies for 30 officers at the St. Lucia Police Academy in early April.
If convicted, Lin faces life in prison for criminal enterprise charges, while Ross Ulbricht, the man behind the Silk Road underground drug market, was indicted on similar charges and convicted of the same offenses. He was given a life sentence.
Notably, the drug conspiracy charge against Lin carries a minimum sentence of 10 years and a maximum sentence of life in prison, while the other two charges carry a combined maximum sentence of 25 years in prison.
