Each listing on Incognito Market was sold by a particular vendor.
- This bank allowed users to deposit cryptocurrency, which facilitated anonymous transactions between buyers and sellers while deducting the site’s commission, again of 5%.
- This 'bank' allowed users to deposit cryptocurrencies into their accounts on the site, conduct transactions, and even earn interest on their deposits.
- As TRM Labs noted, Incognito’s former vendors are nervous about “Lin’s possible cooperation with the government” now that he’s in custody.
- Initially, users from the USA were prohibited from using the Incognito, but now they welcome buyers and sellers from all over the world.
Dark Web Market Owner Arrested In New York After FBI Traces Crypto
Additionally, the market staff imposed a full ban on all opiates and opioids (hydrocodone, oxycodone, heroin, etc), along with all other narcotics that fall under the deliriant class, not just fentenyl like many other darknet markets. Given the Incognito Market's primary focus on narcotics, many users are understandably concerned about their potential exposure to drug dealers. However, in this case, Incognito's administrators have resorted to coercing money from users and vendors who frequented the platform. “As alleged, Rui-Siang Lin was the architect of Incognito, a $100 million dark web scheme to traffic deadly drugs to the United States and around the world,” Attorney General Merrick Garland said in a statement. Incognito suddenly closed in March and the operator extorted all of its customers and vendors with fees of $100 to $20,000 to not publish information about their transactions.
- 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.
- The narcotics conspiracy charge (for the multitude of drug deals enabled by Incognito) carries a 10-year mandatory minimum and up to life in prison.
- Payment for goods on Incognito is made in Monero (XMR) cryptocurrency only, and all addresses are PGP encrypted, so you have nothing to worry about!
- Prosecutors said the online marketplace allowed users to anonymously buy and sell illegal drugs from anywhere on the globe with an internet connection and a Tor web browser, a tool that makes it difficult to track users.
- With the right partnerships, tools, and pressure at key chokepoints—such as when crypto is converted into fiat—law enforcement can still follow the money, identify key actors, and dismantle networks once thought untouchable.
- Upon visiting the site, users were met by a splash page and graphic interface, which is pictured below.
The Fall Of Incognito Market: A Brazen Exit Scam Fone Wrong
His last X post shows a Chainalysis diagram of money flows between dark-web markets and cryptocurrency exchanges. “Stay posted and fuck LE," Pharoah wrote, using the abbreviation LE to mean “law enforcement.” Antinalysis eventually returned, however, and pivoted last year to acting instead as a service for swapping bitcoin for monero and vice versa. A sketch of a dark-web market's infrastructure that Lin emailed to himself eight months before allegedly creating Incognito Market, according to the DOJ. It describes functionality such as how “vendors” and “buyers” would register, make purchases, and encrypt shipping addresses. In the DOJ's criminal complaint against Lin, it points to a handwritten document the FBI pulled from his email, which appears to sketch out a flow chart for a dark-web market's mechanics.
Charges, Court Proceedings, And Ripple Effects
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. 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.
These slip-ups, combined with the forensic analysis of cryptocurrency transactions, allowed law enforcement to build a case against Rui-Siang Lin. By exploiting a vulnerability in the market’s cryptocurrency 'bank' system, they were able to trace several key transactions back to a wallet linked directly to Rui-Siang Lin. By 2023, it had become one of the most popular darknet marketplaces, attracting thousands of users from around the world. By keeping transactions within the market, Lin made it significantly harder for law enforcement to trace payments, adding an additional layer of anonymity for both buyers and sellers. In October 2020, Lin allegedly launched Incognito Market on the Tor network, a platform designed with the sole purpose of enabling anonymous transactions for illegal goods.
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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.
While no single marketplace filled Hydra’s void, Incognito was one of several thriving platforms serving different regions and niches. This approach mirrored the playbook of earlier darknet markets and contributed to Incognito’s rapid growth. In return, Incognito provided an infrastructure for secure (albeit illegal) transactions and acted as an escrow intermediary between buyer and seller. Incognito charged vendors a 5% commission on every sale, a business model that generated millions of dollars in revenue for the platform. Users could register accounts and browse thousands of listings for illegal narcotics ranging from heroin, cocaine, and methamphetamine to LSD, MDMA, ketamine, and prescription pills. Behind the playful incognito-themed logo and slick interface, however, was a bustling bazaar of contraband.
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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. New Incognito Market users are treated to an ad for $450 worth of heroin.
Incognito Market Founder Arrested And Charged
However, Incognito’s case shows that even with Monero in the mix, operational security must be airtight – a single point of weakness (like Lin’s use of a BTC wallet for personal expenses) can compromise the entire scheme. Reviews from users (on forums) often praised Incognito’s user interface and the responsiveness of its support staff. The court proceedings so far have reaffirmed that the dark web is not beyond the reach of the law, and they foreshadow aggressive actions against any successors who dare to fill Incognito Market’s shoes. Legally, the charges against Lin also set precedents in how darknet activities are prosecuted. This is a reminder that anyone facilitating drug trafficking that impacts the U.S. can become a target, regardless of where they sit physically. The money laundering charge – reflecting the financial transactions to wash and move the crypto profits – is punishable by up to 20 years in prison.
Taiwanese Mastermind Behind Incognito Market, A $100 Million Dark Web Platform, Arrested In New York
Incognito Market mimicked legitimate e-commerce platforms, complete with customer service, branding, and a vendor registration system. 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. The unraveling of Lin’s empire began when the FBI detected crypto transfers from Incognito Market to a centralized exchange.
Darknet Market Operators Threaten User Data Leak After Exit Scam
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.
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.
Since that time, and through its closing in March 2024, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. Last week, the Department of Justice arrested two brothers who allegedly conducted a $25 million theft on the Ethereum blockchain. 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. The US authorities arrested Lin at John F. Kennedy Airport on May 18, 2024, effectively ending his illegal activities. Vendors paid a 5% commission on their sales, generating revenue that supported the site’s operations and Lin’s profits.
The only question is whether law enforcement can shut down the market and arrest its operators before the exit scam takes place.” Incognito Market deals primarily in narcotics, so it’s likely many users are now worried about being outed as drug dealers. But with blockchain intelligence advancing and global partnerships strengthening, law enforcement is better positioned than ever to detect, disrupt, and dismantle these operations. That extortion threat, combined with increased tracing and investigative pressure, led many users to flee the platform, dramatically reducing deposits and facilitating law enforcement’s final takedown. In that time, it facilitated more than USD 100 million in drug sales, including hundreds of kilograms of cocaine and methamphetamine, alongside heroin, LSD, MDMA, oxycodone, ketamine, and misbranded prescription drugs. As an innovative and bold venture in the darknet market, Incognito Market presents a vast array of products and services that challenge the boundaries of traditional internet marketplaces.
Lin, who reportedly oversaw a multimillion-dollar operation, was traced and captured through meticulous analysis of crypto transactions linked to drug sales. Meanwhile, Ross Ulbricht, the individual behind the Silk Road darknet drug marketplace, faced similar charges and was convicted of the same crime. According to FBI Assistant Director in Charge James Smith, Lin ran Incognito Market for about four years, was in charge of its operations, including vendors, employees, and customers, and was the primary decision maker. “Under the promise of anonymity, Lin’s alleged operation offered the purchase of lethal drugs and fraudulent prescription medication on a global scale,” said James Smith, an assistant director in the FBI’s New York office.
This bank allowed users to deposit cryptocurrency, which facilitated anonymous transactions between buyers and sellers while deducting the site’s commission, again of 5%. This fee funded market operations, including salaries and server costs. Since its inception in October 2020 until its closure in March, Incognito Market sold vast quantities of illegal narcotics, including hundreds of kilograms of cocaine and methamphetamines, globally via the dark web site that could be reached through Tor web browser. This case, an Organized Crime Drug Enforcement Task Forces (OCDETF) operation, is a great example of full of US law enforcement cooperation and collaboration. 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. Specifically, in February 2024 Incognito users reported withdrawal issues with their BTC deposits – meaning that Incognito would not allow vendors to withdraw funds.
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. 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 DHS Cyber Crimes Center (C3) combats cybercrime, online child sexual exploitation, and criminal exploitation of the internet with state-of-the-art forensic technology.
