Dark Web Market Owner Arrested in New York After Cryptoing the FBI
A 23-year-old man was arrested in New York on suspicion of owning, running and profiting from a $100 million dark web drug marketplace after authorities allegedly traced crypto transactions to his real identity.
Rui-Xiang Lin, known online as “Pharaoh,” was arrested at New York's John F. Kennedy Airport on May 18 and appeared in federal court on Monday, May 20, the Manhattan United States Attorney's Office wrote in a statement.
“For four years, Rui-xiang Lin operated ‘Incognito Market,' one of the largest online platforms for drug sales, conducting $100 million in illegal drug transactions and embezzling millions of dollars from personal profits,” added the FBI assistant director. James Smith.
Anonymous Market was an onion-based e-commerce platform known as the “dark web” or “dark net” in the Tor web browser.
It allowed users to buy and sell drugs like cocaine, LSD, MDMA and prescription amphetamines like Adderall using Bitcoin (BTC) and Monero (XMR) payment methods.
The marketplace asked buyers and sellers to save 5 percent of each purchase and use its crypto services to provide a transit service, according to the Justice Department.
The DOJ announced the shutdown of the marketplace in March of this year in connection with a previously disclosed withdrawal scam that robbed customers of millions of dollars worth of BTC and XMR.
Lynn is charged with participating in a criminal enterprise, drug conspiracy, conspiracy to sell counterfeit drugs and money laundering.
If convicted, Lin faces a mandatory life sentence on the criminal enterprise charge. The narcotics conspiracy charge carries a maximum sentence of life in prison.
The Department of Justice issued a bankruptcy for crypto held in the accounts of Linus Binns and Kraken.
The FBI tracked crypto transfers.
The FBI found Lin and traced his ties to the dark web to an anonymous, centralized crypto exchange account in Lin's name, tracing the partial anonymity market.
According to FBI Task Force Officer Mark Reubens, the crypto wallet controlled by Lin received funds from an anonymous marketplace and sent them to an exchange account in Lin's name.
Rubens listed at least four transfers that the FBI examined showed Linn's crypto wallet sending BTC obtained from an undisclosed market to a “swapping service” to convert it to XMR — deposited into a crypto exchange account that the FBI said belonged to Linn.
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The exchange provided the FBI with Lin's Taiwanese driver's license, which was used to open the account, along with an email address and phone number, Roble wrote.
The FBI said he linked his email and phone number to a Namecap account and used it to buy money from a crypto wallet and token called Linn, a site promoting an anonymous marketplace.
Deposits on the Linn crypto exchange account have grown in an undisclosed market, from $63,000 in 2021 to nearly $4.2 million in 2023, while a second unnamed exchange account deposited $4.5 million between July and November last year.
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