Sheep Marketplace heist of 100,000 BTC could really be the “Biggest Darknet Scam Ever”

The shutdown of the illegal online bazaar Sheep Marketplace that sold illicit goods including guns and drugs through the Tor network can actually be the “Biggest Darknet Scam Ever”. The title has spread across the internet, describing the scam that made $100 million worth of Bitcoin vanish.

Almost a week after the marketplace’s customers realized they had been robbed, two Redditors are still following the trail of evidence left by the thief. The latest updates can be followed via the sub-Reddit /r/SheepMarketplace.

Sheep Marketplace conquered a lot of new clients after the demise of the popular Silk Road, closed by the north-American authorities in October. However, during the past weekend, the online platform administration took the site offline and published a message claiming that the marketplace had been hacked.

As a result, more than 5,400 Bitcoins had been stolen, a value that has been corrected to 100,000 BTC or almost one percent of all the Bitcoins that exist in the world.

Sheep is down

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. 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.

The issues began late last week, when the site prevented users from withdrawing the Bitcoin in their accounts. That was when the website Sheepmarketscam.com was created. This was the first post published on the platform:

Sheep MarketPlace Going to be SCAM ?

That is not confirmed yet. But there are many reasons and mystification about Sheep market now (27/11/2013):

1. Sheep says, withdrawals are allowed for 90% of users already, which is complete lie, as no vendor or user which we contacted is unable to withdraw (probably nobody made any withdrawal from sheep during last week).
2. Sheep market delaying everyday implentation of new tumbler (which is the reason they stopped withdrawals)
3. They don’t allow nobody to withdraw funds temporary.
4. They are just probably waiting to more free bitcoins to come to scam all vendors and customers (customers depositing more and more money for purchase).
5. Support are probably told to just calm people down (they are maybe not aware of what is going on).
6. Account which has 0.00000000 balance receiving messages from support that they can withdraw money (yes sure, can withdraw 0 balance).

At the time, the marketplace’s administrators informed the clients that the site was undergoing “organizational changes”, but they would be able to access their money within a few days. However, shortly after the site’s forums also close down. Finally, on Sunday (30), Sheep Marketplace completely shut down.

Although the administrators immediately blamed a vendor, evidence unearthed by Reddit’s vigilantes suggests the involvement of these same administrators in the heist. The site SheepMarketScam.com, for instance, also believes that over 40,000 BTC belonging to the customers has been transferred to a Bitcoin address belonging to the site’s operators.

Although it will be difficult to catch the responsible for this massive heist and maybe even more difficult to punish him (legally, we mean), this haul also carries risks for the thief. It would be hard for him to launder all this money, now that he is holding on to more than 100,000 BTC.

Sources: Business Insider, Coindesk and Silicon Angle