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Crime on the Darknet: Incognito Market Exit-Scams Users, Swindling Hefty Sums in Bitcoin and Monero

Incognito market's alleged exit scam: what we know

Incognito Market, a notorious darknet platform known for narcotics trading, has reportedly vanished, taking with it a considerable amount of Bitcoin (BTC) and Monero (XMR). Users found themselves locked out, unable to withdraw their digital assets, with Bitcoin and Monero valued at approximately $67,298 and $138, respectively, as of March 5. The platform, previously a bustling hub for illicit trade, is speculated to have held assets totaling between $10 million to $30 million, as estimated by Dark Web Informer.

The whispers of deceit started on March 5, when users aired their grievances about failed withdrawal attempts, igniting fears of an "exit scam." 

This term, darkly familiar within the crypto sphere, refers to operators of platforms disappearing with users' funds. The alarm was further raised when "Pharoah," Incognito’s administrator, broke the silence on the Dread platform, attributing the withdrawal issues to an ongoing system upgrade. 

They assured:

"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,” 

Yet, this reassurance did little to quell the rising panic among users, as continued difficulties in withdrawing funds led to further accusations against the marketplace’s administrators.

The aftermath and broader impact on the crypto community

The situation escalated when a prominent dark web security sleuth, Hugbunter, revealed a conversation with "Pharoah," wherein an alleged bribe was offered to silence the uproar on Dread. 

Hugbunter's post left no room for doubt: 

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

This acknowledgment marked a definitive turn, serving as a stark warning to the community to steer clear of Incognito, highlighting the irreversible loss of funds already ensnared by the scam.

Amidst this turmoil, the crypto market witnessed significant movements. Bitcoin, riding a bullish wave, surpassed its previous all-time high, peaking at just above $69,200. Meanwhile, Monero showcased its resilience with a 7-day high of $151.74, albeit experiencing a slight retraction to $142.01 at the time of publication. 

The Chainalysis 2024 Crypto Crime Report sheds light on the broader implications, revealing that darknet marketplaces garnered at least $1.7 billion in revenue in 2023. This rebound comes after the takedown of Hydra, previously the largest such marketplace.