Dark Web Drug Ring Laundered $8M via Crypto

Between January 2019 and August 2022, the FireBunnyUSA operation established itself as a major dark web vendor, distributing cocaine, MDMA, and ketamine across all 50 states and Washington, D.C. from their base in Flushing, Queens. The group mailed more than 10,000 packages nationwide while advertising on dark web marketplaces as an established supplier offering “quality products with fast, discreet delivery.” Manhattan District Attorney Alvin L. Bragg, Jr. characterized the scheme as “a brazen attempt to use the dark web to conceal a national drug trafficking operation” that could lead to “the same dangerous drug-related violence in our neighborhoods.”

The operation’s scale became apparent through extensive investigation, including 11 undercover purchases conducted by Manhattan investigators between June 2021 and August 2022. These purchases confirmed the direct shipment of cocaine, MDMA, and ketamine into Manhattan. The five individuals involved—Nan Wu, Peng Peng Tang, Bowen Chen, Zixiang Lin, and Katie Montgomery—all entered guilty pleas for their roles in the sophisticated network that combined traditional drug distribution with advanced financial crime techniques.

The financial dimension of the operation revealed a highly sophisticated money laundering apparatus that processed approximately $7.9 million in total proceeds. According to court documents, Wu and Tang collected nearly $8 million in Bitcoin payments throughout the operation’s duration, with over $3.1 million funneled through cryptocurrency exchanges. Investigators discovered close to $900,000 worth of cryptocurrency on Tang’s mobile device alone, highlighting the substantial digital footprint left by the operation.

The laundering technique involved converting Bitcoin into Monero (XMR), a privacy-focused cryptocurrency designed to be untraceable, before converting it back to Bitcoin and moving it through exchange accounts controlled by Wu, Tang, and other conspirators. This multi-layered approach allowed the group to obscure the origin of funds while maintaining liquidity. The operation laundered over $734,000 through U.S. crypto exchanges and converted approximately $2.4 million in Bitcoin into Chinese Yuan through foreign exchanges, demonstrating the international scope of their financial operations.

Following his guilty plea to criminal sale of a controlled substance and money laundering on April 3, Wu was ordered to forfeit 20 BTC, 3,297 XMR, and $12,857 in cash recovered during searches. The significant cryptocurrency forfeiture represents one of the larger seizures in recent dark web enforcement actions and underscores the substantial profits generated by the operation.

The FireBunnyUSA case emerges amid a global crackdown on dark web operations and cryptocurrency-enabled crime. Recent enforcement actions 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 that seized $200 million in crypto and resulted in 270 arrests, and India’s bust of “Edison,” an alleged darknet vendor accused of moving 10,000 LSD blots monthly through Monero.

According to Andrew Fierman, Head of National Security Intelligence at Chainalysis, while a growing number of criminals are migrating to privacy coins like Monero and Zcash for anonymity, “the vast majority of criminal activity still uses mainstream cryptos, such as Bitcoin, Ethereum and stablecoins.” Fierman noted that “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.”

Despite the challenges posed by privacy coins, Fierman emphasized that “like other cryptos, [they] operate on an immutable ledger,” meaning records of illicit transactions remain permanent and “such evidence can be investigated and prosecuted even years later.” This permanence of blockchain records proved crucial in the FireBunnyUSA investigation, enabling prosecutors to trace the movement of funds despite the group’s sophisticated laundering techniques and ultimately secure convictions against all five participants.