In addition, in November 2023, an undercover law enforcement officer received several tablets purporting to be oxycodone purchased on the Incognito Market. Tests on these tablets revealed that they were not authentic oxycodone at all but were, in fact, fentanyl pills. One poignant trend is the increasing involvement of international law enforcement and harsher legal consequences, as evidenced by Incognito’s case. Each high-profile bust – from Silk Road to AlphaBay to Incognito – serves as a learning experience for agencies.
Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced today that GREI MENDEZ was sentenced to 45 years in prison for trafficking fentanyl out… Attorney for the Southern District of New York, the FBI’s New York and Cincinnati field offices, the Drug Enforcement Administration, the U.S. Food and Drug Administration’s Office of Criminal Investigations’ Kansas City field office, and the New York City Police Department.
Incognito Market Built-in Wallet
With mounting evidence, prosecutors in the Southern District of New York quietly filed charges and obtained an indictment against Lin under seal. “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. If found guilty, Lin could face a mandatory minimum sentence of life in prison for participating in a continuing criminal enterprise.
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Conversely, some privacy advocates look at cases like Lin’s and argue that people like him misuse anonymity tools, making it harder for those tools to be available for legitimate purposes. 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. Only earlier this week did it become clear exactly what Lin’s “professional background and qualifications in the field” allegedly entailed, seemingly unbeknownst to either his Taiwanese employers or his St. Lucian law enforcement trainees. For nearly four years, according to the US Justice Department, 23-year-old Lin ran a dark-web drug market called Incognito that authorities say enabled the sale of at least $100 million worth of narcotics, ranging from MDMA to heroin for cryptocurrencies including bitcoin and monero. That was before Lin’s alleged theft of his own users’ funds earlier this year and then his arrest last week by the FBI in New York’s JFK airport. HSI New York leads and directs all operational and administrative activities of the El Dorado Task Force (EDTF).
User Interface Of Incognito Market URL
These combined efforts—Monero’s privacy features, the internal bank system, the use of multiple wallets, and encrypted communications—allowed Incognito Market to operate with a high level of anonymity, making it extremely difficult for law enforcement to trace transactions or identify users. Lin’s use of Monero, a privacy-focused cryptocurrency, added an additional layer of security. Unlike Bitcoin, which has a transparent public ledger, Monero’s transactions are completely private. This made it the perfect currency for darknet transactions, as it allowed users to send and receive funds without leaving a trace. Fascinated by the anonymity that cryptocurrencies like Bitcoin and Monero offered, Lin started experimenting with small-scale darknet markets. He learned how these markets operated, studying their vulnerabilities and thinking about how he could improve upon them.
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“The defendant’s greed and disregard for others was further demonstrated by his alleged extortion attempt during the platform’s final days.” The marketplace generated $83,624,577 in revenue throughout its operation, allegedly yielding Lin at least $4,181,228 from its 5% commission. “You’ll be surprised at the number of people that relied on our “auto-encrypt” functionality. And by the way, your messages and transaction IDS were never actually deleted after the expiry,” the Incognito Market admin said. “….SURPRISE SURPRISE!!! Anyway, if anything were to leak to law enforcement, I guess nobody ever slipped up.”
The mass-extortion of Incognito Market users comes just days after a large number of users reported they were no longer able to withdraw funds from their buyer or seller accounts. The cryptocurrency-focused publication Cointelegraph.com reported Mar. 6 that Incognito was exit-scamming its users out of their bitcoins and Monero deposits. A 2022 Twitter thread about Incognito posted by Eileen Ormsby, an author of several dark-web-focused books including The Darkest Web, shows how the market by that time had added features that may have helped it to catch the attention of security- and safety-conscious users. Lin has been charged with not only narcotics conspiracy and money laundering but also running a “continuing criminal enterprise,” the so-called “kingpin statute” reserved for organized crime leaders who allegedly oversaw at least five employees. Listings included offerings of prescription medication that was advertised as being authentic but was not.
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The first major breakthrough in the investigation came in late 2023, when an undercover agent made a crucial purchase on Incognito Market. The agent had ordered what was supposed to be oxycodone, a prescription painkiller that is frequently sold on the dark web. However, when the drugs arrived and were sent to a lab for testing, it was revealed that the pills were not oxycodone at all—they were fentanyl, a potent synthetic opioid that has been responsible for thousands of overdose deaths worldwide.
A federal district court judge will determine any sentence after considering the U.S. Lin was arrested at John F. Kennedy International Airport on May 18 and was presented in Manhattan federal court before U.S. Lin’s background in blockchain technology allowed him to innovate beyond what had been done before.
Incognito Darknet Users
Undercover agents posed as both buyers and sellers, engaging in hundreds of transactions on the platform, gathering as much information as possible about the market’s operations. The marketplace was raking in millions of dollars in cryptocurrency, with Lin taking a 5% cut from every transaction. His technical expertise, combined with his shrewd business acumen, allowed him to build a fortune in the shadows of the dark web. But as Incognito’s user base expanded, so too did the scrutiny from law enforcement agencies around the world.
Joseph Vasquez pleaded guilty on April 15, 2024, and was sentenced on Aug. 8, 2024, to 10 years in prison. Roman pleaded guilty on May 30, 2024, and was sentenced on Nov. 14, 2024, to 10 years in prison. They all pleaded guilty to conspiracy to create a counterfeit substance and distribute 500 grams or more of a mixture and substance containing methamphetamine. In the past 24 hours, the homepage for the Incognito Market was updated to include a blackmail message from its owners, saying they will soon release purchase records of vendors who refuse to pay to keep the records confidential.
- Based on this publicly available information, authorities concluded that Lin possessed the requisite technical knowledge and experience to operate Incognito Market.
- 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.
- One of the key features that sets Incognito Market apart is that it uses Monero, a privacy-focused cryptocurrency, as its primary payment method.
- In 2021, Pharaoh introduced a service called “Antinalysis,” which was essentially a counter-intelligence tool for crypto users.
- When Pharaoh attempted to extort his users, many panicked vendors likely reached out to trusted contacts or even law enforcement for help.
- This multi-layered approach made it nearly impossible for law enforcement to penetrate the market’s defenses.
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. The Center investigates large-scale cybercrime threats and provides expertise on cybercrime investigations to the field. It also uses global law enforcement networks, like Europol, to combat cybercrime threats. According to Krebs On Security, the administrators pulled off an “exit scam” that left users unable to withdraw millions of dollars from the platform. Rui-Siang Lin – who also went by the online pseudonym “Pharoah” or “faro” – is accused of having run the entire business.
U.S. authorities have arrested and charged a Taiwanese national with operating darknet drug bazaar Incognito Market, which he allegedly used to facilitate over $100 million in crypto-denominated sales of illegal narcotics including fentanyl. As law enforcement agencies followed the money trail, they eventually connected the cryptocurrency transactions to a digital wallet that had been linked to Lin. Additionally, Lin made the critical mistake of using identifiable personal information at some point during his operations, which law enforcement was able to capture. This could have been during the registration of online accounts or through other transactions that required some form of identification. 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. Unlike previous darknet marketplaces, Incognito was designed from the ground up to be more secure, more user-friendly, and far more lucrative for its operators.
Some users reuse passwords, forget to encrypt certain messages, or make other basic mistakes that can leave them vulnerable. Lin knew that a single point of failure could bring down the entire operation, so he distributed the market’s servers across multiple countries, each with its own security protocols. This meant that even if one server was compromised, the rest of the network would remain intact, allowing the market to continue operating without interruption. Born in Taiwan, Lin was a bright student, excelling in computer science and cybersecurity. By the time he graduated from National Taiwan University in June 2023, he had already built a reputation as a blockchain enthusiast and a skilled developer.
In a fourth example, a San Fernando Valley man, Brian McDonald, 23, was sentenced to more than 20 years in federal prison in the Central District of California for using darknet marketplaces to sell hundreds of thousands of dollars’ worth of fentanyl-laced pills and cocaine to buyers nationwide. 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. To put Incognito’s trajectory in context, it helps to compare it with its predecessors and contemporaries, and to consider what its downfall implies for the future of illicit online markets. But Lin’s arrest was more than just a victory for law enforcement—it was a turning point in the fight against cybercrime. The investigation had demonstrated that even the most sophisticated darknet operations could be infiltrated and dismantled, given enough time and resources.
