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Sheep Marketplace goes down to biggest heist in net history

If you thought there was a brown, stewy storm brewed up from the demise of drug marketplace Silk Road, wait until you hear the story behind the shut down of its offspring, Sheep Marketplace. It looks like someone managed to hack the site, stealing around $6 million worth of Bitcoins and to recoup their losses, the admins continued operating the site without telling people, before scarpering off with any remaining bitcoins.

While the timing of the robbery isn’t exact, the owner of the Sheep Marketplace posted a message up about two weeks ago announcing that it had been hacked and that seller Ebook101 was responsible. That user made off with over 5,400 bitcoins from users and site owner provisions, worth about $6 million at the height of the currency’s value. The admins then apologised and said it would work on getting any remaining bitcoins out to site users:

“We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101,” read the initial announcement. “This vendor found bug in system [sic] and stole 5400 BTC – your money, our provisions, all was stolen. We were trying to resolve this problem, but we were not successful. We are sorry for your problems and inconvenience, all of current BTC will be distributed to users, who have filled correct BTC emergency adress.”

However, for the next ten days, users reported that they were unable to withdraw their remaining coins. Admins stayed rather dark on this and over the weekend, the site was shut down.

sheep
Sheep became the second biggest haven for Silk Road users after the latter site’s shutdown

People are suggesting that this ultimately means the owner decided to cut his losses and run, taking any remaining bitcoins as payment for his running the site in recent months. They’re on his case though, having tracked down the bail out account with its 17,000+ bitcoins. It’s also thought that the guy’s name might be out there, but I won’t post it here until we know more.

While that’s deplorable, the site’s users are more annoyed at the original thief, who despite sitting on almost millions (less now that bitcoin value is dipping), is unable to cash any of it out, as tech-minded sleuths are on his case.

It’s currently being discussed over at the SheepMarketplace subreddit, where users like Sheeproadreloaded2 and theNodManOut, who together have been playing cat and mouse with the bitcoin thief, tracked his initial transfer from Sheep and then followed the coins through the blockchain.

What follows is a daring chase across metaphorical trains, rooftops and down busy highways, with one or other of the above redditors always on the crook’s trail. Most impressively, the former of the two spent several hours chasing him through a Bitcoin tumbler, which would be nigh on impossible if the thief hadn’t been trying to launder so many coins at once.

Like a scene from a movie that’s just entered the sewers, Sheeproad dived into the murky depths of a bitcoin tumbler, correctly guessing the man’s choice of site (BitcoinFog) and sent his own coins into the murky depths. What returned, were fractions of someone else’s coins, the crook’s coins. This gave him a chance to follow them to their resting place, a wallet that the thief had stored them all in safely – after splitting them up – before possibly going to bed, secure in the knowledge that he was safe. Sidenote: he wasn’t.

blockaddress
Surprise! Note how he’s already started moving the coins now that he’s been discovered

Now people have begun bombarding the account – which can be found here – with small bitcoin payments, attached with public notes proclaiming the stolen nature of the coins and asking anyone that deals with the man to give information. Looking back over the account’s history, it’s been operating for a long while, so people have dealt with this person before, meaning people out there should know this guy’s bank details and therefore, possibly his name too.

This story has legs. Keep an eye on it as it could get very interesting in the next few days.

In other online drug marketplace news, Black Market Reloaded, the companion hydra-head of Sheep that rose to prominence with the closure of Silk Road, has announced that it will close its doors as without competition, it will receive too much heat, in terms of traffic and attention from law enforcement. Other sites like Silk Road 2 and Tor Marketplace are expected to see a flood of new users as people find somewhere new to buy their substances from.

KitGuru Says: If you’re sat there thinking though that a bunch of druggies got their comeuppance here, you need to check the numbers on that account. This guy may have stolen over 5,000 – and probably far more – bitcoins from Sheep users, but his current total is at over 92,000 bitcoins. That’s almost $100 million. Chances are he’s done this before and he’ll do it again if he gets away with it. People like this threaten the very future of a currency that has provided many people with a way to anonymously buy things. It’s online cash and it’s offering whole new ways of doing business without the middle man. 

Of course if you have any information on this guy, let us know, let the Redditors know and let the many angry Sheep users know. Even if they can’t get their coins back, simply knowing the guy responsible was apprehended somehow would be a nice serving of internet justice. 

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