KEY POINTS
- Incognito Market sells cocaine and heroin among others, as well as some "misbranded" prescription medication
- Transactions between vendors and buyers were facilitated by the marketplace's own "bank" that used crypto
- Over $100 million worth of narcotics were illegally sold through the marketplace
U.S. authorities have arrested the alleged owner of one of the online world's largest "incognito" illegal narcotics market that allows customers to pay using cryptocurrencies, the U.S. Department of Justice (DOJ) announced Monday.
"As alleged, Rui-Siang Lin operated a sophisticated and dangerous online narcotics marketplace through which he profited millions of dollars at the community's expense ... the so-called 'dark web' is not a safe haven for those who seek to break the law," said U.S. Attorney Damian Williams as per a press release.
Lin, 23, the alleged owner of Incognito Market, was arrested on May 18 in connection to his ownership and operation of the Incognito Market, which allowed customers worldwide to search through thousands of narcotics listings. Illegal narcotics were sold on the marketplace, and some of the prescription medication offered were "misbranded." Among the list of illegal drugs made available through Incognito Market were heroin, oxycodone, cocaine and alprazolam among others.
The online marketplace ran through cryptocurrency transactions, as per the DOJ. "Incognito Market had its own 'bank,' which allowed its users to deposit cryptocurrency on the site into their own 'bank accounts.' After a narcotics transaction was completed, cryptocurrency from the buyer's 'bank account' was transferred to the seller's 'bank account,' less than the 5% fee that Incognito collected."
Lin, who went by the online pseudonym Pharaoh, allegedly oversaw all of Incognito Market's operations. He made the decisions regarding the business and "every aspect of the multimillion-dollar operation."
Homeland Security Investigations (HAS) Agent in Charge Ivan J. Arvelo said the marketplace resulted in a staggering illicit sale of over $100 million in narcotics, including some drugs that were mislabeled and later found to include fentanyl.
Lin is now faced with a possible mandatory minimum sentence of life in prison after he was charged with multiple counts related to his operation of a continuing criminal enterprise.
Schemes related to cryptocurrencies have been on the rise in the past years, even as many companies within the emerging fintech industry have been hard at work in ensuring the proper guardrails are in place to prevent digital assets from being used by illicit actors.
One such digital token under scrutiny is Tether (USDT), world's largest stablecoin. Late in March, a new report revealed that the United States and United Kingdom launched a probe into more than $20 billion worth of USDT that flowed through a sanctioned crypto exchange based in Russia.
