Five Plead Guilty Over $7.9M Dark Web Crypto Drug Operation

Manhattan prosecutors have secured convictions against five members of a dark web drug trafficking network that shipped thousands of packages containing illegal narcotics in all 50 states and Washington, D.C. while laundering millions of dollars through crypto.

Nan Wu and his four associates, Peng Peng Tang, Bowen Chen, Zixiang Lin, and Katie Montgomery, previously entered guilty pleas for their involvement with the operation known as "FireBunnyUSA," which advertised itself on dark web marketplaces as an established supplier offering quality products with fast, discreet delivery.

"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 on Wednesday. “Even though this activity originated on the dark web, it can still lead to the same dangerous drug-related violence in our neighborhoods that we see far too often.”

Wu received a minimum sentence of 6 1⁄2 years in state prison after entering a guilty plea to criminal sale of a controlled substance and money laundering on April 3.

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

The operation ran from January 2019 through August 2022, initially based in Flushing, Queens, where the group mailed more than 10,000 packages nationwide.

Manhattan investigators conducted 11 undercover purchases from the vendor between June 2021 and August 2022, including cocaine, MDMA, and ketamine shipped directly into Manhattan.

Through the operation, the ring laundered over $7.9 million, including over $3.1 million in proceeds through crypto exchanges.

Wu and Tang collected nearly $8 million in BTC payments throughout the operation's run. Investigators found close to $900,000 worth of crypto on Tang's phone alone.

The ring converted funds into Monero (XMR), a privacy-focused crypto designed to be untraceable, before converting it back to Bitcoin and moving it through exchange accounts controlled by Wu, Tang, and others.

Investigators said over $734,000 was laundered through U.S. crypto exchanges and $2.4 million in Bitcoin converted into Chinese yuan abroad.

Following the crypto trail

Recent global crackdowns include the seizure of 145 BidenCash domains tied to $17 million in stolen card trades in the U.S., Operation RapTor’s coordinated raids across 10 countries seizing $200 million in crypto and arresting 270 people, and India busting “Edison,” an alleged darknet vendor accused of moving 10,000 LSD blots a month through Monero.

Andrew Fierman, Head of National Security Intelligence at Chainalysis, previously told Decrypt that while a growing number of criminals moving to privacy coins such as Monero and Zcash for anonymity is a concern, "the vast majority of criminal activity still uses mainstream cryptos, such as Bitcoin, Ethereum and stablecoins."

"Crypto is only useful if you can buy and sell goods and services or cash out into fiat, and that is much more difficult with privacy coins, especially as many mainstream exchanges have offboarded the use of privacy coins, such as Monero,” Fierman added.

Privacy coins, “like other cryptos, operate on an immutable ledger,” Fierman said, meaning records of illicit transactions remain permanent and “such evidence can be investigated and prosecuted even years later.”