Dread and Incognito Drama as Darknet Market Exit Scams

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One of the largest Daknet markets in the English market, Incognito Market, has taken some interesting steps in the last few days, then ended their reign as the Darknet Market exit scammed, taking millions of user funds with them. The rumours were confirmed by HugBunt3r, and various other well-known Darknet users and higher-ups. Let’s look at the end of the Incognito market.

Key Insights

  • A week ago, Incognito Market invited users to deposit ETH and DAI as new payment options.
  • Users began experiencing issues with withdrawals for all coins soon after.
  • The market continued to accept deposits amid rising suspicions of an exit scam.
  • Cyber threat intelligence estimated Incognito Market’s value between $10 to $30 million.
  • Users reported withdrawal issues starting March 5th.
  • Incognito’s administrator, “Pharoah,” claimed the issues were due to system upgrades.
  • HugBunt3r, a head Dread Admin, confirmed the exit scam and rejected a bribe from Pharoah.
  • Incognito previously acquired, which has been a point of controversy.
  • Pharoah attempted to trade the domain for a reduction of scrutiny on Dread.

Just a week ago, Incognito market made an interesting move inviting all users to deposit ETH and DAI as options for payments. This was likely to grab a little more attention and get a flurry of new users to try out the new system before finalising their last escrow payments and running away with customers and vendor’s funds.

First, reports began circulating on Dread of incognito not processing Bitcoin and Monero withdrawals. A darknet marketplace is widely known as a platform for trading in narcotics and illegal substances. 

While deposits remain active on the darknet site, users of the platform are set to lose million in XMR, BTC, ETH, and DAI. The exit scam rumors come off the back of Monero and Bitcoin price surges in recent weeks.

Chainalysis 2024 Crypto Crime Report indicated that darknet marketplaces turned over an estimated revenue of nearly $1.7 billion in 2023. The revenue generated is a significant increase compared to 2022, when authorities shut down the Hydra marketplace.

Since Hydra’s shutdown, the darknet has seen a rise in smaller marketplaces. According to cyber threat intelligence provider, Incognito Market is valued between an estimated $10 to $30 million, though this is entirely speculative. However, Mega Darknet Market is said to be leading the darknet marketplace with over $500 million in crypto inflows over the year.

What We Know About the Incident

On March 5th, darknet marketplace users began to voice their frustrations and concerns about the inability to process withdrawals from Incognito Marketplace. The marketplace’s issues have sparked concerns over a possible exit scam.

HugBunt3r Announces Incognito Exit Scam

The concerning reports triggered a response from Incognito administrator “Pharoah”, who subsequently posted on Dread. Pharoah stated that the issues experienced on the darknet marketplace were due to upgrades being made in Incognito’s withdrawal system. 

In his post, Pharoah said, “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.

The administrator’s post further indicated that the site was in the process of processing 154 withdrawals of both BTC and XMR, “3% of the total number of withdrawals submitted in the last 24 hours.” 

Pharoah assured users of the platform that “the coins would arrive, as they always do and always have been.” He also promised users that the team at Incognito Market aims to launch their major interface and currency upgrade before their third year anniversary. This was all clearly smoke an mirrors.

The continued withdrawal issue led to a post being shared by head Dread Admin “u/Hugbunt3r.” He claimed to have been in discussions with Incognito’s site administrator. HugBunt3r went on to point out that it was well documented that Incognito Market had previously baught as a way to twist the narrative and primarily influence users to use his market. HugBunt3r had pushed Pharoah to sell Darknetlive to a third party and impartial individual instead, but this was clearly all part of Pharoah’s plan.

After clearly heated discussion over the incident, Hugbunt3r alleges to have been offered a bribe from Pharaoh at request to remove any posts concerning Incognito. The bribe offer and Hugbunt3r’s refusal to remove the post have effectively confirmed the suspicions of the alleged exit scam. Hugbunt3r also stated in a post that he could confirm the exit scam going on at Incognito Marketplace.

It is well known that Incognito purchased DarkNetLive and previously I have mentioned to Pharoah that if and when he decides to shut down, it would be great if he could hand over the domain in the process to ensure it isn’t used maliciously. I’ve been talking to him back and fourth the past few hours and got to the point where I told him a warning is going live, to which his response was to try and bribe me to take Dread down or wipe all posts regarding Incognito, in return he will hand over DNL. Big mistake, he of all people should know I can’t be bought and I won’t hesitate to confirm the exit.=

HugBunt3r In a post Titled “Incognito 100% Exit Scam – AVOID NOW

Easy trade, for one week of dread downtime or clean dread. I got no use for the domain anyway.

Pharoah offering a trade to HugBunt3r.

“Yeah, we’re done here. Please try to share warnings wherever possible. I’m going to get the warning on Daunt as soon as I can. The effects of the exit scam are yet to be felt, as the price of BTC and XMR remain stable and on the rise. However, the incident serves as a reminder for users to be vigilant and implement robust security protocols when using the dark web.”

HugBunt3r’s, Incognito exit announcement

Naturally, this turned into a “who has the biggest cock” fight, as Darknetlive released a post claiming it was all a “smear campaign on both Incognito Market and Darknetlive.” Attempting to prove that HugBunt3r supported the idea of Incognito purchasing the website. However, while HugBunt3r was able to provide evidence for his beliefs, Incognito/ Darknetlive have not given anything to prove that Incognito is not Exit Scamming.