Darknet Market turns out to be a scam: founders steal millions in Bitcoin and Monero

Users of a major darknet marketplace report that they have been unable to withdraw Bitcoin and Monero since Tuesday, March 5. This all looks like a so-called ‘exit scam’.

The marketplace – Incognito Market – is best known as a platform for narcotics trading and has according to cyber threat intelligence provider Dark Web Informer is valued between $10 million and $30 million.

Exit scam confirmed

User accusations against the marketplace’s administrators began forming on March 5, after users warned that their crypto withdrawals were failing.

The messages even prompted a response from Incognito’s administrator “Pharoah,” who posted on the Reddit-like darknet site Dread to assure users that the problems were merely due to changes in Incognito’s recording systems.

“Please note that the initial phases of this upgrade may briefly impact usability in the first few days as the servers multitask on both old data sync and new requests,” they said.

However, continued reports of withdrawal issues, followed by a Dread message from a well-known dark web security sleuth and administrator, now appear to confirm the “exit scam.”

In a Dread message, Hugbunter claimed that they had been in discussions with “Pharoah,” where they were eventually offered a “bribe” to delete all Dread messages about Incognito.

“Unfortunately, I can now confirm the exit scam 100%.”

“My warning here won’t make a difference to the funds already lost to Incognito, but hopefully this is now enough to keep users away and avoid losing more,” Hugbunter added.

Exit scam at the perfect time?

The alleged exit scam comes amid a massive Bitcoin rally that has seen the cryptocurrency break its previous all-time high of $68,990 and set a new one at just above $69,200.

Monero has also risen over the past week, reaching a 7-day high of $151.74, although it has since fallen to $142.01 at the time of publication.

In late February, the Chainalysis 2024 Crypto Crime Report revealed that darknet marketplaces received revenues of at least $1.7 billion in 2023 – a recovery from 2022 data when authorities shut down the world’s largest darknet marketplace, Hydra.