The crypto scam landscape is evolving just as quickly as the crypto ecosystem itself.
Very recently, a "popular" marketplace for buying and selling illegal drugs on the darknet allegedly pulled an exit scam on its users.
According to reports, these users have been left with no access to millions of Bitcoin and Monero, sparking outrage and frustration in the dark web community.
Operating since 2022, Incognito Market was one of the biggest and busiest darknet markets. It sold a range of illegal items and services, including counterfeit money, hacking tools, and fake IDs, in addition to drugs like cocaine, heroin, MDMA, and cannabis.
Based on its estimated number of users, vendors, and transactions, Incognito Market was valued between $10 million and $30 million, according to Dark Web Informer, a cyber threat information company.
Because of their private and secure features, Bitcoin and Monero used to be two of the most popular cryptocurrencies among the platform's users.
March 5, 2024, saw the first indications of trouble for Incognito Market as customers began to complain about not being able to withdraw their crypto from the website.
While some users said they were simply ignored, others said they were receiving error messages.
The Incognito Market administrator, also known as "Pharoah," attempted to defuse tensions among users by putting up a statement on Dread, a Reddit-like platform.
He first claimed that a system update on the website was the reason for the short-term withdrawal problems.
"Please note that the initial stages of this upgrade may briefly affect usability in the first few days since the servers are multitasking on both old data synchronization and new requests," Pharoah wrote.
But as the days went by, users' suspicions and anger increased as the withdrawal issues continued. While some customers thought Pharoah was lying to them and stealing their money, others thought the website had been hacked or taken over by the authorities.
On March 10, 2024, Hugbunter—a well-known dark web security specialist—finally verified the exit scam. Hugbunter disclosed that he had communicated with Pharoah, who had proposed to pay him a bribe to delete any negative posts about Incognito Market on Dread.
"Unfortunately, I can 100% confirm the exit scam now," Hugbunter wrote. "My warning here will not make a difference to funds already lost to Incognito, but hopefully, this will be enough now to try and ensure users stay clear and avoid losing more."
Hugbunter also advised users to avoid any other darknet marketplaces that were affiliated with or endorsed by Pharoah, as they could be part of the same scam.
Since there is no official data on the amount of crypto owned by Incognito Market, it is hard to tell how much money was taken by the exit scam.
On the other hand, it is most likely in the millions of dollars, given the approximate value of the website and the volume of visitors and merchants.
Some people alleged they had lost all of their life savings, while others claimed to have lost Bitcoin and Monero worth thousands of dollars.
This coincides with the release of the Chainalysis 2024 Crypto Crime Report, which revealed that despite the shutdown of Hydra and other significant platforms, darknet markets made at least $1.7 billion in cryptocurrency revenue in 2023.
According to the charts, Monero has responded in terms of price.
As shown in the weekly chart above, Monero has failed to break above the ascending trendline around $147 and is teasing a drop to the $125.95 support.
If Monero is set to escape this massive 15% drop, the cryptocurrency has to remain above $147 and reattempt a break above the ascending trendline shown above, for a chance to rally further to around $175 or even higher.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.