As of Tuesday, March 5, users of a prominent darknet market, known as Incognito Market, reported difficulties withdrawing Bitcoin (BTC) and Monero (XMR), sparking concerns of a potential "exit scam." Incognito Market, primarily recognized as a platform for drug trading, holds an estimated worth ranging between $10 million and $30 million, according to cyber threat intelligence provider Dark Web Informer.
Complaints regarding failed cryptocurrency withdrawals began surfacing on March 5, prompting accusations against market administrators. In response, an Incognito administrator known as "Pharoah" addressed the issue on the Reddit-like darknet site Dread, attributing the withdrawal issues to adjustments in Incognito's withdrawal system. They assured users that the situation was a result of an upgrade, which might temporarily affect availability during the initial phase.
Despite Pharoah's reassurances, continued reports of withdrawal problems, coupled with alarming posts from a prominent dark web security detective and administrator known as Hugbunter, appeared to confirm suspicions of an impending exit scam. In a post on Dread, Hugbunter disclosed having conversations with Pharoah, alleging that they were offered a "bribe" to remove any negative posts about Incognito. Subsequently, Hugbunter unequivocally declared the situation as an exit scam.
Expressing concern for affected users, Hugbunter emphasized the importance of vigilance to prevent further losses. This purported exit scam unfolds amidst a bullish trend in Bitcoin, where the cryptocurrency surpassed its previous all-time high to reach over $69,200. Monero also experienced an uptick in value, hitting a seven-day high of $151.74 before dipping to $142.01 at the time of reporting.
In late February, Chainalysis's 2024 Cryptocurrency Crime Report disclosed that darknet markets amassed at least $1.7 billion in revenue in 2023, rebounding from the previous year's decline following the shutdown of Hydra, the world's largest darknet market. Although no single marketplace has filled the void left by Hydra, smaller markets are thriving by catering to niche markets and assuming specialized roles, as highlighted by Chainalysis. Large darknet markets continue to dominate, accounting for over $500 billion in cryptocurrency inflows.
