The Federal Bureau of Investigation (FBI) has successfully dismantled a $100 million dark web narcotics marketplace, arresting its owner by meticulously tracing illicit cryptocurrency transfers. Rui-Siang Lin, a 23-year-old resident of Taiwan, known online as "Pharoah," was apprehended on May 18 at John F. Kennedy Airport in New York.

Lin operated the 'Incognito Market,' a notorious onion-based e-commerce platform on the dark web, for approximately four years. The platform, accessible via the Tor web browser, allowed users to browse anonymously and purchase various illegal drugs, including LSD, MDMA, and prescription amphetamines like Adderall, using cryptocurrencies such as Bitcoin and Monero.

According to FBI Assistant Director in Charge James Smith, Lin reaped millions of dollars in personal profits from the marketplace. The arrest followed extensive collaboration with other law enforcement agencies and several undercover operations, enabling the FBI to trace transactions back to Lin.

The marketplace incentivized its users to use cryptocurrencies by offering discounts and escrow services, which ultimately facilitated the FBI’s tracking efforts. Transactions from Lin's wallet were traced to an unnamed centralized crypto exchange account that was KYC-compliant (Know Your Customer), linking directly to Lin.

Authorities discovered that at least four Bitcoin transfers from Lin's wallet were directed towards a “swapping service” to convert Bitcoin to Monero (XMR), a privacy-focused cryptocurrency. The XMR was then deposited into a crypto exchange account managed by Lin. Further investigation revealed that Lin’s exchange account grew from holding $63,000 in 2021 to nearly $4.2 million by 2023, while another account linked to the case saw deposits of $4.5 million between July and November 2023.

Critical evidence, including Lin’s driving license, email account, and phone number, was obtained from the exchange, leading to his arrest. The phone number was also linked to a Namecheap account, a domain hosting platform, which was used to purchase a domain promoting the dark web marketplace.

In addition to the unnamed exchange, Lin held accounts at major crypto exchanges Binance and Kraken, which have since been seized by the FBI. The U.S. Department of Justice (DOJ) announced that the Incognito Market was shut down in March 2024.

Lin faces severe legal consequences, including one count of engaging in a continuing criminal enterprise, carrying a mandatory minimum sentence of life in prison, and one count of narcotics conspiracy, with a minimum sentence of 10 years and a maximum of life in prison. He also faces charges of money laundering and conspiracy to sell adulterated and misbranded medication, which could add another five years to his sentence.

This arrest follows the FBI's recent uncovering of a $43 million Ponzi scheme disguised as a cryptocurrency investment opportunity, further highlighting the agency's commitment to combating cybercrime and illicit activities in the cryptocurrency space.