Millions in Bitcoin stolen from Sheep dark market as user flees

One of the ‘dark marketplaces’ offering illegal and semi-legal services via the anonymized web browser Tor has shut down, according to reports – with a user fleeing with millions of dollars worth of Bitcoin.

A senior user of Sheep Marketplace “stole” a large number of bitcoins totalling $4.9 million, according to the BBC’s report.The actual figure may have been much higher. Business Insider claims up to $44 million was taken.

“We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101. This vendor found bug in system and stole 5400 BTC – your money, our provisions, all was stolen,” the site admins said in a statement.

“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 ditributed to users, who have filled correct BTC emergency adress. I would like to thank to all SheepMarketplace moderators by this, who were helping with this problem. I am very sorry for this situation. Thank you all.”

Sheep Marketplace gained many customers and sellers during the brief period Silk Road was inactive. At present, the site is unreachable via Tor. Some reports, such as this via TapScape, suggest that the entire site was a scam designed to earn Bitcoin, created during the period while Silk Road was offline.

Business Insider reports that the theft may have been much bigger than initial reports, “Sheep users and other Bitcoin followers on reddit say that the administrators began blocking withdrawals of bitcoins from the site more than a week ago, and may have absconded with as much as $44 million from the site’s users, pointing to a movement of 39,900 bitcoins visible in the public record of Bitcoin transactions known as the blockchain.”

Site users have begun their own detective work, chronicled on a Reddit thread devoted to the thefts, “He was desperately creating new wallet addresses and moving his 49 retirement wallets through them, but having to wait for 3 or 4 confirmations each time before moving them again. Each time I caught up, I “666″ed him – sent 0.00666 bitcoins to mess up his lovely round numbers like 4,000. Then,all of a sudden, decimal places started appearing, and fractions of bitcoins were jumping from wallet to wallet like grasshoppers on a hotplate without stopping for confirmations.”

“I think he’s asleep now in the czech republic. When he awakes, he will see my “666″ next to his 96,000 stolen, freshly-laundered bitcoins. Along with lots of insults attached to fragments of bitcoins that I hope you are about to send here…”

It’s the latest in a series of “heists” involving the cryptocurrency, as reported by We Live Security here. Despite FBI action against ‘dark market’ sites such as Silk Road, illegal commerce still thrives on Tor – and Silk Road relaunched as Silk Road 2.0.