Administrator of Darknet Narcotics Market Incognito Arrested

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Administrator of Darknet Narcotics Market Incognito Arrested

This week, the US Department of Justice announced the arrest of a Taiwanese man, Rui-Siang Lin, also known as Pharaoh, as he transited through JFK airport, in connection with his operation and ownership of “Incognito,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world.

Incognito, an online narcotics bazaar that resided on the darknet, was formed in October 2020. Since that time, and through its closing in March, Incognito Market, according to the indictment, sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. Lin operated the Incognito market under the pseudonym “Pharoah.” As “Pharoah” — the leader of Incognito market — Lin supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation.

Incognito Market, designed for seamless transactions, incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service. Upon visiting the site, users were met by a splash page and graphic interface, pictured below:

After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice including misbranded prescription medication, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam. The site also listed non-authentic narcotics such as oxycodone intended to scam would-be buyers. An example of listings on Incognito market is below:

Like legitimate ecommerce sites, each listing on Incognito was sold by a particular vendor. To become an Incognito vendor, each vendor was required to register with the site and pay an admission fee. In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market. That revenue, according to the indictment, funded Incognito Market’s operations, including paying “employee” salaries and for computer servers. Lin, according to DOJ, collected millions of dollars of profits from Incognito. Customers and vendors on Incognito used cryptocurrencies to transact on the site.

Customers from all over the world used global VASPs to send cryptocurrency to Incognito Market

In perhaps the most extraordinary twist in the case, Lin, who is only 23 years-old, worked for the Taiwanese Ministry of Foreign Affairs. As part of his job, Lin trained law enforcement on how to use blockchain analytics.

Another incredible detail of the case is the way in which the administrator(s) of Incognito Market (presumably including Lin) “exit scammed” vendors on the site. Specifically, in February 2024 Incognito users reported withdrawal issues with their BTC deposits – meaning that Incognito would not allow vendors to withdraw funds. Following this, users were urged to stop depositing funds into Incognito. According to TRM, deposits to Incognito dramatically decreased but still continued during this time period. 

In mid-March 2024, the Incognito administrator(s) announced an exit scam and threatened to release all of the vendor information and private messages between vendors and buyers to law enforcement. Pharaoh asked vendors for payment by April 1, 2024 in exchange for not releasing information to law enforcement. While on April 1, 2024, Pharoah announced that the extortion announcement had been a joke, vendors on the platform had already looked for other options.

While Lin is in custody, the case could take a number of twists and turns with Incognito vendors nervous about Lin’s possible cooperation with the government. This case, an Organized Crime Drug Enforcement Task Forces (OCDETF) operation, is a great example of full of US law enforcement cooperation and collaboration. The case is being investigated by FBI, Homeland Security Investigations, DEA, FDA, and the New York Police Department. The case is being prosecuted by the US Attorney’s Office for the Southern District of New York.

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