The crypto community’s frequent claims about “anonymity” are once again under the microscope following the Incognito Market trial. A federal court in Manhattan sentenced Taiwanese national Rui-Siang Lin to 30 years in prison, ordering the forfeiture of over $105 million after convicting him for operating the dark web platform Incognito and engaging in illegal financial activities. Prosecutors said Lin, known as “Pharoah,” ran the site facilitating the sale of more than $100 million in illicit goods.
Crypto Traces on the Dark Web Platform
Incognito Market went well beyond a basic buyer-seller directory. Court documents detailed how, under Lin’s leadership, the platform emulated mainstream e-commerce systems by investing in branding, advertising, and customer support. Supporting tens of thousands of transactions, its internal payment system—dubbed the “Incognito Bank”—enabled over 400,000 user accounts, 1,800 vendors, and more than 640,000 individual transactions. The marketplace reaped millions in revenue via Bitcoin and Monero wallets.
Blockchain Analysis and Digital Tracing Efforts
The investigation highlighted that the promised “privacy” of cryptocurrency often falls short in practice. Law enforcement tracked substantial fund movement within Incognito’s internal “bank” wallets. They identified “Administrator Wallet-1” as a major recipient of Bitcoin, with analytical tools revealing the conversion of those assets to Monero through online exchanges and subsequent transfers to a centralized exchange wallet—tracing the path of criminal proceeds step by step.
These transfers showed how funds were routed and processed through various wallets. Authorities also mapped operational expenditures. They discovered that domain name purchases—made via Namecheap—were funded from wallets linked to Lin’s identity and contact details.
Although blockchain traces alone could not solely pinpoint Lin’s identity, the transfer of illicit profits to exchanges requiring identity verification played a crucial role in identifying suspects. Operation-related statements and system messages posted on forums were further matched to the administrator’s online persona.
Exit Strategy and Additional Evidence
Investigators revealed that in March 2024, Lin abruptly shut down the platform, withdrawing at least $1 million stored in “Incognito Bank” and making it inaccessible to users. He then threatened former users, demanding money under the threat of exposing their transaction histories and crypto addresses. Authorities argued that this sudden closure and subsequent extortion underscored the criminal nature and organization behind the platform.
Wider Impact on the Crypto Sector
The Incognito case demonstrated that blockchain analytics is not simply a law enforcement tool but also significantly influences trust, compliance, and business practices across the digital asset sector. Institutions, realizing even sophisticated crime syndicates can be tracked, began to reassess risk management strategies in crypto markets.
Ongoing regulatory developments are increasing pressure on privacy-focused coins and mixer services. As oversight tightens, exchanges and DeFi platforms face growing demands for stricter customer verification, advanced detection of suspicious activity, and transparent record-keeping standards.
Undercover Operations and Legal Disputes
During the proceedings, Lin’s defense team claimed an informant affiliated with a US regulatory agency held a crucial operational role within Incognito Market. Authorities denied these allegations. The controversy is expected to fuel future policy debates about the scope and duration of undercover access in high-level digital investigations.
