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Bitcoin Heist: Millions Vanish from Online Black Market

05
Dec
2013

A secretive online black market was robbed over the weekend, costing its users possibly as much as $100 million in Bitcoins — and some say the thieves were the marketplace owners themselves. After the FBI shut down the largest online black market, Silk Road, in October, a number of other black market sites filled the vacuum. One was a narcotics bazaar called Sheep Marketplace. Like Silk Road and most of its ilk, Sheep Marketplace was only accessible via Tor, the anonymizing software designed to protect users Internet anonymity. Furthermore, all transactions were in Bitcoin, a decentralized online currency that is difficult to trace. MORE: Security and Privacy Apps and Plugins On Sunday (Dec. 1), Sheep Marketplace abruptly closed down, claiming one of its vendors by the name of EBOOK101 had exploited a security vulnerability to steal $6 million in Bitcoins. Most, if not all, of that money belonged to the sites numerous users, who used it to buy and sell their dubious wares. This vendor found bug in system and stole 5,400 BTC —your money, our provisions, all was stolen, reads the message posted on the now-shuttered sites homepage. We were trying to resolve this problem, but we were not successful. Despite the messages promise that all of current BTC will be distributed to users, who have filled correct BTC emergency address, it doesnt appear that any Sheep Marketplace users have received refunds. Thats all of the theft that can be confirmed. But the story doesnt end there. Some believe that the thieves were Sheep Marketplaces administrators themselves, and that the whole marketplace was an elaborate scam. A website called sheepmarketscam.com, set up before Sheep Marketplaces closing, lists what it claims to be evidence suggesting that the theft was an inside job. Sheep Marketplace users werent able to withdraw Bitcoins for up to a week before the sites shutdown, according to several Reddit users. Deposits, however, were still possible. The admins blamed the problem on a technical glitch and said it would be fixed within a few days. They then said the problem was fixed, though on Reddit, former Sheep Marketplace users say that was never the case. By the time of the sites shutdown on Dec. 1, withdrawals still hadnt been enabled. Sheepmarketscam.com alleges that many of Sheep Marketplaces higher-ranking administrators and vendors had drastically slashed prices, allegedly to encourage as many people as possible to deposit money. And a public but anonymous record on a website called Blockchain.info, which tracks Bitcoin transactions, shows a transfer of 39,918 Bitcoins into a wallet associated with Sheep Marketplace at some point over the weekend. At the current Bitcoin exchange rate, thats more than $43 million — far more than the originally reported 5,400 BTC, or $5 million. MORE: Browser Plugin Secretly Mines Bitcoins at Your Expense Finally, a pair of Reddit users say theyve been chasing a series of Bitcoin transactions that they claim originate with the Sheep Marketplace theft. The amount involved is more than 96,000 BTC, almost $100 million, and has been moved from wallet to wallet several times over the past several hours. Meanwhile, other anonymous online markets on the so-called dark web are also affected by Sheep Marketplaces closing. A site called Black Market Reloaded blocked new members, saying on its forums that Tor-based anonymous websites arent designed to handle large volumes of users, and then announced a shutdownshut down as well, saying the site needed to close for maintenance. Sheep went down and BMR cant stand, wrote a Black Market Reloaded admin called Backopy in a forum post dated Dec. 1. In the post, Backopy says that people will be given the opportunity to withdraw their funds before the closing. Dont worry, we dont rip anyone and will be back stronger than ever, wrote another administrator called LeContog in the same thread. Email [email protected] or follow her @JillScharr and Google+. Follow us @TomsGuide, on Facebook and on Google+. 10 Reasons Coin Card Could Be a Security Nightmare 7 Ways to Lock Down Your Online Privacy 13 Security and Privacy Tips for the Truly Paranoid Copyright 2013 Toms Guides , a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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