What just happened? In its recent crackdown on illegal dark web activities, the US Department of Justice announced the arrest of Rui-Siang Lin. Lin, who went by the dark web handles "Pharoah" and "faro," ran a narcotics distribution website called "Incognito Market." The US Drug Enforcement Agency (DEA) arrested Lin over the weekend at New York's JFK International Airport.
Authorities suspect Lin of operating one of the largest drug rings on the internet. The 23-year-old began his illegal enterprise in October 2020, when he was just a teenager. Since then, Incognito Market sold more than $100 million in misbranded medications and illicit narcotics, including alprazolam, cocaine, heroin, ketamine, LSD, MDMA, methamphetamines, and oxycodone. The site also dealt in the deadly drug fentanyl, both with and without the buyer's knowledge. In one case, an investigator purchased what was supposed to be oxycodone, but lab tests showed they were fentanyl tablets.
The website offered a crypto-banking service called "Live Bank," with secure wallets so sellers and customers could efficiently process anonymous transactions. Live Bank allegedly conducted over $80 million in Bitcoin and Monero transactions. Sellers paid an upfront fee to establish a storefront and crypto wallet, and Incognito Market collected a 5-percent fee on every transaction. All together, Lin allegedly made enough to net millions of dollars in profit after expenses, like paying employees, server procurement, and general upkeep.
"Drug traffickers who think they can operate outside the law on the dark web are wrong," US Attorney General Merrick B. Garland said of the bust. "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. The long arm of the law extends to the dark web, and we will bring to justice those who try to hide their crimes there."
Officials claim that as they closed in on an arrest, Lin began an "exit scam" that extorted users by locking up their crypto in the Live Bank platform. The DEA shut down the entire website in March, but the DoJ didn't say whether it would return funds locked in Live Bank to customers. That prospect seems unlikely since the service was solely for trading in illegal drugs.
The bust came after a years-long multi-agency investigation in the US and overseas. Lin was arraigned on Monday. If convicted, he faces a minimum of life in prison for "engaging in a continuing criminal enterprise." He also could receive maximum penalties of life for narcotics conspiracy, 20 years for money laundering, and five years for conspiracy to sell "audulterated and misbranded" medications.