Then in March of this year, the site suddenly dropped offline, taking all the funds stored in buyers' and sellers' wallets with it. According to the FBI, the market took nearly a year to catch on, with virtually no sales during that time. Seven months later, Lin would allegedly launch Incognito Market. An April post on Lin Rui-siang’s LinkedIn account about his cybercrime and cryptocurrency training course for police in St. Lucia. Finally, despite his supposed expertise in cryptocurrency tracing and digital privacy, it was Lin's own relatively sloppy money trails that, the DOJ claims, helped the FBI to trace his real identity. The statement boasted that 30 officers had learned “nuances of the dark web" and cryptocurrency tracing skills from Lin, who had “used his professional background and qualifications in the field" to teach them how to better combat cybercrime.
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Pharaoh, who had built a reputation as the operator of one of the most popular markets, had taken advantage of his own community in an unprecedented way. For many users, this was not just about the financial loss, but about a deep sense of betrayal. Despite this, some users chose to comply with the demands, paying up to protect their identities and avoid potential legal consequences. This created an uneven playing field, with many forced to choose between paying the ransom or facing the potential exposure of their personal information and criminal activities. For less active users, the ransom might be in the hundreds of dollars.
In fact, cryptocurrency transactions leave behind a trail—a blockchain ledger that records every transaction ever made. This discovery gave law enforcement agencies the leverage they needed to intensify their efforts against Incognito. Law enforcement agencies had to adopt new strategies, working with blockchain analysts and leveraging cutting-edge forensic tools to crack the layers of encryption protecting the marketplace’s financial records. For many vendors, Incognito became the go-to platform for conducting business, as it offered a more secure and efficient environment than its competitors.
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“Thanks to the unwavering efforts by ICE HSI, Europol and our international partners, we’re cracking the code of the so-called ‘safe spaces’ for cybercriminals — they are in our sights and we’re not backing down.” “This record-breaking operation sends a clear message to every trafficker hiding behind a screen — your anonymity ends where our global reach begins,” said ICE acting Director Todd Lyons. These actions provided investigators across the globe with invaluable leads and evidence, strengthening the ongoing fight against cybercrime and illicit activities on the darknet.
Incognito Market's downfall began with users reporting issues withdrawing their funds. It offered a range of illicit goods and services, from narcotics to counterfeit documents, attracting a wide array of buyers and sellers. The announcement stated that operators had collated incriminating information about vendor identities, purchase details and private messages.
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For the darknet market users (buyers and vendors), Incognito’s rise and fall carries its own lessons, which influence the broader trends. For instance, some vendors have shifted to platforms like Telegram or WhatsApp (in closed groups) to sell drugs, which is a decentralization of the classic market model – harder to police, but also less efficient for buyers. The rise and fall of Incognito Market is a chapter in the ongoing evolution of darknet marketplaces – a world that has proven remarkably adaptive in the face of law enforcement crackdowns. When Pharaoh attempted to extort his users, many panicked vendors likely reached out to trusted contacts or even law enforcement for help. The operational strategies of Incognito Market borrowed heavily from normal online marketplaces. Federal authorities have arrested a 23-year-old Taiwanese national and charged him with running an online market that sold $100 million worth of illicit narcotics, including fentanyl, cocaine, methamphetamine, heroin, LSD, and ketamine.
Prosecutors said Lin would face a minimum penalty of life in prison if convicted for engaging in a continuing criminal enterprise or narcotics conspiracy. The DOJ said each vendor paid 5% of every sale to Incognito Market, which funded its operations and salaries. The Department of Justice said Rui-Siang Lin has been arrested in connection to allegedly operating the Incognito Market, which the DOJ says helped trade narcotics anonymously around the world. Lin demanded ransom in the range of $100 to $2,000 from them in exchange of not turning their data over to the law enforcement.
- It allowed users to buy and sell drugs, including cocaine, LSD, MDMA and prescription amphetamines, such as Adderall, using Bitcoin (BTC) and Monero (XMR) as payment methods.
- To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee.
- “Thanks to the unwavering efforts by ICE HSI, Europol and our international partners, we’re cracking the code of the so-called ‘safe spaces’ for cybercriminals — they are in our sights and we’re not backing down.”
- When Pharaoh attempted to extort his users, many panicked vendors likely reached out to trusted contacts or even law enforcement for help.
- He could also receive a maximum penalty of life in prison for narcotics conspiracy, a maximum penalty of 20 years for money laundering, and a maximum of five years for conspiracy to sell adulterated and misbranded medication.
Investigations
Ironically, amidst these threats, the administrator expresses "gratitude" towards customers and vendors for their involvement with Incognito Market, a sentiment that clashes starkly with their current extortion tactics. The operator of Incognito revealed the scale of information at risk, including a comprehensive dump of 557,000 orders and 862,000 cryptocurrency transaction IDs. "….SURPRISE SURPRISE!!! Anyway, if anything were to leak to law enforcement, I guess nobody ever slipped up."
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Agents conducted undercover operations to gain access to the marketplace, allowing them to gather intelligence and evidence about the owner. The findings were incredibly eye-opening, including a hand-drawn illustration of the marketplace and its configurations. The operational security mistakes the FBI describes suggest that, regardless of which side of the cryptocurrency cat-and-mouse game Lin intended to end up on, he was far from a criminal mastermind. Although the FBI says Lin tried to swap his bitcoins for harder-to-trace monero before cashing out the cryptocurrency at an exchange, the criminal complaint points to timing and amount correlations that nonetheless allowed the FBI to follow his funds to a crypto exchange where he allegedly liquidated the dirty funds. In a post to the dark-web market forum Dread, Pharoah made clear that Antinalysis was designed not to help anti-money-laundering investigators, but rather those who sought to evade them—presumably including his own dark-web market's users.
Traceable Transactions
- “Collectively, these coding projects indicate that LIN has significant technical computing knowledge, including knowledge necessary to administer a site like (“Incognito Marketplace”),” the complaint said.
- Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam.
- One of the key features that sets Incognito Market apart is that it uses Monero, a privacy-focused cryptocurrency, as its primary payment method.
- This development marks a significant breakthrough in combating cyber-enabled drug distribution.
- In 2021, Pharaoh introduced a service called “Antinalysis,” which was essentially a counter-intelligence tool for crypto users.
‘MommaBear’ has announced that all server access keys have been changed to prevent further unauthorized transactions. The dark web will continue to evolve, but so too will the dedication and capability of those who seek to uphold the law. Its downfall signals that even the savviest operators can be caught, which may deter some amateurs but is unlikely to extinguish the darknet trade entirely. Buyers are reminded that even “trusted” markets can vanish overnight, taking escrow funds with them or – worse – exposing their data.
The 23-year-old darknet kingpin, popularly known as Pharoah or Faro, had long been on the FBI’s radar and eventually met his comeuppance at JFK airport. In May 2024, the US Department of Justice (DOJ) announced the arrest of alleged Incognito Market mastermind Rui-Siang Lin. After independent cybersecurity reporter Brian Krebs wrote about the Antinalysis service in August 2021, describing it as an “anti anti-money laundering service for crooks,” Pharoah posted another message complaining that Antinalysis had lost access to its blockchain data source, which Krebs had identified as the anti-money-laundering tool AMLBot, and that it would be going offline. “This service is dedicated to individuals that have the need to possess complete privacy on the blockchain, offering a perspective from the opponent's point of view in order for the user to comprehend the possibility of his/her funds getting flagged down under autocratic illegal charges.” In total, Incognito Market promised to leak more than half a million drug transaction records if buyers and sellers didn't pay to remove them from the data dump.
Based on a public analysis made by researchers on January 9, 2024, the marketplace had 2,144 users, 237 sellers, 1,102 products, and 1,565 total orders. The marketplace has been active since July 1, 2023, and has been among the top five infamous marketplaces providing shopping for illicit goods in the darkweb, offering more than 16 categories of narcotics and over 1000 products. For the marketplace users, the situation had begun to get grim. Incognito Market was a globally available online narcotics bazaar active through Tor web since October 2020, when it was created by Lin. On May 18, 2024, Homeland Security Investigations (HSI) New York, in coordination with law enforcement partners, arrested Rui-Siang Lin at John F. Kennedy International Airport in connection with his operation and ownership of Incognito Market.
This fragmentation can actually make law enforcement’s job harder in some ways, as the targets become more numerous and dispersed. Each time this happens, it erodes trust in the remaining markets and pushes users to either flock to other established markets or retreat to smaller, invite-only communities. Incognito’s demise also highlighted the persistent issue of trust and instability in the darknet market ecosystem. Many modern darknet markets have since gone further, with some operating exclusively in Monero to avoid the kind of blockchain tracing that helped catch Lin. By 2020, one of the leading markets, Empire Market, infamously exit-scammed and disappeared with users’ funds, leaving a power vacuum. It’s a nuanced debate, but the legal outcome here – with Lin held accountable in a high-profile conviction – will undoubtedly be cited as a victory in the fight against cybercrime and illicit online trade.
“This arrest underscores the dedicated, ongoing efforts of law enforcement to identify and dismantle illicit drug networks operating from every shadowy recess of the marketplace,” NYPD Commissioner Edward A. Caban said in a statement. NEW YORK, NY – A 23-year-old man from Taiwan has been arrested on charges of selling at least $100 million worth of illegal drugs online through a site on the dark web known as the “Incognito Market.” He allegedly supervised all of Incognito Market’s operations, “including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation,” the DOJ said. As law enforcement agencies followed the money trail, they eventually connected the cryptocurrency transactions to a digital wallet that had been linked to Lin. Dubbed “Antinalysis” and “AMLBot,” the services purport to offer a glimpse into how one’s payment activity might be flagged by law enforcement agencies and private companies that try to link suspicious cryptocurrency transactions to real people. Two new dark web services are marketing to cybercriminals who are curious to see how their various cryptocurrency holdings and transactions may be linked to known criminal activity.
The Justice Department said Incognito Market included “many features of legitimate e-commerce sites such as branding, advertising, and customer service.” The indictment includes several images from the site, including its splash page. German police took down the Nemesis market in March and previously seized Kingdom Market in December 2023. Founded by the enigmatic "Pharaoh," this platform thrived by leveraging sophisticated trust-building mechanisms among criminals.
Recognize & Report Crime
U.S. Attorney Damian Williams stated on Monday, when Lin appeared in court, that the so-called “dark web” is not a sanctuary for individuals attempting to engage in unlawful activities. In turn, Lin took a 5% cut of every sale as users channeled funds through the platform. This shows how vulnerable dark web users really are, even if they think they are safe.
