Five people plead guilty in $7.9 million dark web crypto drug operation

Prosecutors in Manhattan have secured convictions for five members of a dark web drug trafficking network that shipped thousands of packages containing illegal drugs to all 50 states and Washington, D.C., while laundering millions of dollars through cryptocurrency.

Nan Wu and four of his associates, Peng Peng Tang, Bowen Chen, Zixiang Lin, and Katie Montgomery, previously entered guilty pleas for their involvement in an operation known as “FireBunnyUSA,” which advertised itself on dark web marketplaces as an established supplier of quality products with prompt and discreet shipping.

“This alleged scheme was a brazen attempt to use the dark web to conceal a national drug trafficking operation,” Manhattan District Attorney Alvin L. Bragg Jr. said in a statement Wednesday. “Even if this activity originates from the dark web, it can spark the same dangerous drug-related violence in our neighborhoods that we see all too often.”

Wu pleaded guilty on April 3 to charges of sale of a controlled substance and money laundering and received a minimum sentence of 6 1/2 years in state prison.

The court also ordered Wu to forfeit approximately 20 BTC, 3,297 XMR, and $12,857 in cash recovered during the investigation.

The effort ran from January 2019 to August 2022, and initially based in Flushing, Queens, the group mailed more than 10,000 packages across the country.

Between June 2021 and August 2022, Manhattan law enforcement officials conducted 11 stings from dealers involving cocaine, MDMA, and ketamine shipped directly to Manhattan.

Through this operation, the ring laundered more than $7.9 million, including more than $3.1 million in proceeds through virtual currency exchanges.

Wu and Tan collected approximately $8 million in BTC payments through the execution of the operation. Investigators found nearly $900,000 worth of cryptocurrency on Tan’s cell phone alone.

Ring converted the funds into: Monero (XMR) is a privacy-focused cryptocurrency designed to be untraceable before converting back to its original crypto. Bitcoin They then move it through exchange accounts controlled by Wu, Tang and others.

Investigators say more than $734,000 was laundered through U.S. cryptocurrency exchanges, and $2.4 million in Bitcoin was converted into Chinese yuan overseas.

Follow the trajectory of cryptocurrencies

Recent global crackdowns include the seizure of 145 BidenCash domains linked to $17 million in stolen card transactions in the United States, Operation Raptor’s coordinated raids across 10 countries that seized $200 million in cryptocurrencies and arrested 270 people, and the bust in India of “Edison,” an alleged darknet vendor that allegedly moved 10,000 LSD blots a month through Monero.

Andrew Fierman, director of national security intelligence at Chainalysis, previously said: decryption Although there are concerns that an increasing number of criminals are turning to privacy coins such as Monero and Zcash for anonymity, “the vast majority of criminal activity still uses mainstream cryptocurrencies such as Bitcoin, Ethereum and stablecoins.”

“Cryptocurrencies are only useful if you can buy and sell goods and services or convert them into fiat currency. That’s much harder to do with privacy coins, especially since many mainstream exchanges have offboarded the use of privacy coins such as Monero,” Fiermann added.

Fiermann said PrivacyCoin “operates on an immutable ledger, like other cryptocurrencies,” meaning illegal transactions remain permanently recorded and “such evidence can be investigated and prosecuted even years later.”