The “anonymity” claim, which is frequently voiced in the cryptocurrency world, was questioned once again in the Incognito Market case. The federal court in Manhattan sentenced Taiwanese citizen Rui-Siang Lin to 30 years in prison and the confiscation of more than $105 million for running the dark web platform Incognito and engaging in illegal financial activity. According to the accusations, Lin operated the platform under the pseudonym “Pharoah” and over $100 million worth of illegal products were sold through the site.
Crypto Traces from Dark Web Platform
Incognito Market has gone beyond a typical buyer-seller list. During the judicial process, it was stated that under Lin’s management, the platform took an example from mainstream e-commerce systems and was supported by operational elements such as branding, advertising and customer services. With its own payment infrastructure called “Incognito Bank”, which facilitates transactions between users and sellers, a total of more than 400 thousand user accounts, 1,800 sellers and more than 640 thousand transactions have been recorded. The platform generated millions of dollars in revenue through Bitcoin and Monero wallets.
Blockchain Based Tracking and Analysis Process
The focus of the investigation revealed that the “privacy” claim provided by crypto was not fully met in practice. Authorities tracked significant fund movements through Incognito’s internal “bank” wallets. In particular, it was determined that a large amount of Bitcoin was transferred to the wallet named “Administrator Wallet-1”. In the analysis, it was determined that the Bitcoin sent from this wallet to online exchange services was converted into Monero and deposited into a central exchange wallet shortly afterwards.
As a result of these transfers, the funds were monitored to be processed in different wallets. The platform’s infrastructure expenditures were also traced; It was determined that the wallets used for domain name payments and domain purchases made through Namecheap were made with identity and contact information linked to Lin.
In the incident, although blockchain traces alone did not confirm Lin’s identity, the transfer of crime proceeds to stock exchanges and points requiring identity verification was decisive in identifying the suspects. Additionally, operational descriptions and system messages in the forums were also matched with the administrator ID.
Exit Method and Additional Evidence
In March 2024, it was announced that Lin closed the platform and withdrew at least 1 million dollars held in the “Incognito Bank” from users’ access, and then threatened the users with blackmail. This method; It involves demanding money by threatening to reveal user histories and crypto addresses. According to officials, the sudden closure; It presented operational indicators that strengthen the control of the system and the gravity of the crime.
Reflections in the Crypto Industry
The Incognito case revealed that blockchain analysis is not just a law enforcement tool, but has a direct impact on trust, compliance and business strategies across the entire ecosystem. Institutions have begun to re-evaluate their perception of risk in digital asset markets, seeing that even complex criminal organizations can be tracked.
With advances in security and regulation, regulatory pressure on privacy-focused coins and mixer tools has also increased. In the process, exchanges and DeFi platforms faced higher standards for account verification, detecting suspicious transfers, and creating transparent transaction records.
Undercover Investigators and Regulatory Confusion
During the lawsuit, Lin’s defense team alleged that a whistleblower working for relevant institutions in the United States served in critical operational roles on the platform. Authorities objected to these claims. It is stated that this debate may lead to discussions at the policy level in the future on issues such as the duration and scope of secret access in high-level investigations.
