
Bitcoins stolen from the users of Sheep Market Place? - arvindravi
https://blockchain.info/address/1EiVHZnDVjFH6Tic1YmWUSfYmVUnUZdnMU
======
nullymcnull
Seems a little premature to point at the blockchain and say "STOLEN!". Most
people won't be able to make much sense of that. The whole situation is
complicated.

More info:
[http://www.reddit.com/r/SheepMarketplace/comments/1rpy1t/i_w...](http://www.reddit.com/r/SheepMarketplace/comments/1rpy1t/i_was_wrong_it_is_a_scam_proof_inside/)
[http://www.sheepmarketscam.com/](http://www.sheepmarketscam.com/)

tl;dr: For a week or so, many users have been unable to withdraw BTC from
Sheep. Admins have been claiming technical problems as they try and implement
an automatic tumbler (money laundry to obfuscate transactions) - which
(conveniently) could be claimed as a legit reason for all the huge transfer
activity seen in the blockchain. They implemented a countdown timer for
withdrawals, which for many users and vendors has now counted down to 0, yet
withdrawals still aren't happening. They've set a minimum withdrawal amount of
1BTC, which given the insane price of BTC right now seems really outrageous.

Most damning, several vendors who are admins, moderators, or closely
affiliated with admins, are reported to have suddenly started doing something
which is very frequently seen in drug market cons: Offering far larger
quantities than they ever have before, at unusually low prices (50% or less
than their previous pricing), and requiring FE (immediate and _upfront_
release of funds to them rather than going through escrow). Frequently done to
rope in the maximum amount of hopeful suckers before bailing with the money.

The market is still up and running right now, although their forums are down
with this message: "We are enabling a spam filter for the forums, as the
number of posts had got out of control. We will be enabling the forum once
this is in place. Please try to stay calm. This is a temporary measure, and we
will keep everybody updated when we have further information".

~~~
tedunangst
Obvious question: why not let people check the "I understand the risks" box
and withdraw without mixing?

~~~
nullymcnull
They're not claiming that mixing is required to let people withdraw securely
or anything; it was never implemented before, the original SR never had it
implemented the way that people assumed they did, etc. They seem to be
claiming that attempts to implement the mixing led to technical problems which
has buggered up withdrawals rather fundamentally.

With weeks having passed, it should have been easy to implement some sort of
emergency measure that would let them transfer money back to people who wanted
it. Instead they continued doing business as usual - money in, but not out -
while implementing things like this withdrawal countdown system, which
arguably seems calculated to try and maintain some confidence and keep the BTC
rolling in.

It seems very likely that this _is_ in fact a big scam, particularly given the
shady behaviour of prominent and admin-affiliated vendors also happening, but
the blockchain info linked isn't in and of itself definitive proof of anything
much right now.

------
pyalot2
You are surprised that when you trust your coins to the anonymous operator of
a drug marketplace that you get ripped off?

There's three separate reasons why you're screwed:

1) You have no recourse because you can't report the theft to police.

2) You have no recourse because you can't identify the operator, he's
anonymous, which means he's also hidden from you.

3) You have no recourse because you can't undo your transaction.

As a good rule of thumb, only perform transactions in bitcoin doing legal
things, that leave you at least with some recourse in case things do go wrong.
And if you sat there, holding your coins, thinking "oh, I'm just gonna buy
drugs with them, what could possibly go wrong", you seriously shouldn't have
bitcoin, they're not good for you. Oh, and drugs are also not good for you, so
please don't do them.

~~~
RyanZAG
Even using bitcoins for legal things leaves you little recourse - this is the
whole point of bitcoin. When you avoid government regulation and oversight you
also avoid the protections it gives - this should hopefully be obvious to
anyone.

~~~
pyalot2
If by recourse you only mean chargeback, sure. But that's not the whole story.

If you have a legal entity behind something, like say, bitpay or coinbase, you
can take legal steps if they screw you over. You can take them to small-claims
etc.

And if you don't trust some entity, you can use escrow with bitcoins, it's
possible to setup a transaction where the escrow provider has no way to get at
the funds, but can just release to either of two addresses (back to you or
forward to the merchant). But of course, the escrow provider would also be a
legal entity, otherwise you'd have no recourse against them if you feel they
unfairly resolved a dispute against you.

Bottom line is, if you engage in legal business, with legal entities, and take
appropriate precautions, you are no less protected than using national
currency and chargebacks. If you don't, well, you've got nobody else to blame
but yourself.

~~~
pyalot2
@RyanZAG

Please look into what escrow means. Of course you can do business with an
entity you're not sure is legit. The assumption is that you trust the escrow
provider, and the Escrow provider is trusted by the merchant. So, the critera
of trust for the escrow provider, is quite a bit higher than a random online
store.

If carefully select the escrow provider, check their business registration,
make sure there's a legitimate entity behind them, this makes dealing with
possibly fraudulent entities as safe as with fiat.

~~~
RyanZAG
You're going to use escrow for all of your transactions? There is no way the
general public is going to do that. I think even those who are more paranoid
would give up the attempt after using escrow to do transactions after a few
months and just use regular money. Or more likely, just stop using escrow and
use bitcoins anyway, and then complain when they get stolen.

~~~
pyalot2
You're using escrow already when you use a bank account, CC processor, paypal,
google wallet etc.

You don't really get a choice, and you carry the mandatory cost because
merchants roll the cost of chargeback fraud, CC fees and banking fees over
into your purchase price, no matter if you think you'll need the added service
or not.

------
nwh
Doubtful. The balance was never 39,917BTC, it's been dropping funds in and out
for almost a month now. If it was stolen, they took their time doing it.

~~~
gwern
The scam has been going on for at least a week. There's no hurry.

------
PeterisP
I wonder why you don't see news articles stating 'bank robbers steal $ 123000
from users of [random-bank-branch]' ... could it be because if someone hacks
or robs a bank or a legitimate payment service provider such as westernunion
or paypal, they are required to eat the loss, not pass it on to users?

~~~
ceejayoz
Bank robbers typically walk away with a few grand if they're lucky, and it'll
almost certainly have a dye pack and a tracker in it. Bank robbery is a fool's
business.

39k BTC is what, $39 million worth? You're right, news articles cover that
differently than a $123,000 loss that's covered by insurance.

~~~
patrickk
> Bank robbers typically walk away with a few grand if they're lucky, and
> it'll almost certainly have a dye pack and a tracker in it. Bank robbery is
> a fool's business.

Exactly. It's all fraud now - much higher rewards with much lower risk of
getting caught. Why try to break into a bank vault waving a gun in the air
when you can skim relatively small amounts from millions of credit cards or
commit identity theft and take out loans in someone else's name, all from a
different country to your victim.

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n1c
Bitcoin is making hacking seriously profitable.

------
tester112
This sums up all the references to this sheep scam matter
[http://www.deepdotweb.com/2013/11/30/sheep-marketplace-
scamm...](http://www.deepdotweb.com/2013/11/30/sheep-marketplace-scammed-
over-40000000-in-the-biggets-darknet-scam-ever/)

Apparently that the owner also got doxxed.

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coldcode
Expect organized crime to take an interest in bitcoins. Shady operators and
little oversight makes it an easy target.

~~~
ceejayoz
They already have. CryptoLocker is raking in tens of millions of Bitcoins as
ransom payments.

~~~
yebyen
I think you mean tens of millions in bitcoins. There are not now (nor will
there ever be), more than 2.1 tens of millions of bitcoins.

~~~
ceejayoz
You're right, sorry! Yes, tens of millions of dollars worth of BTC.

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user24
don't understand why multi signature isn't more commonly used.

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Throwaway6161
Rumors are that SMP was a scam and that it wasn't hacked, but that those
operating the site stole money mainly from the vendors. There is also a page
about this:

[http://www.sheepmarketscam.com/](http://www.sheepmarketscam.com/)

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locusm
Are there any recorded cases of someone recovering stolen BTC?

~~~
gasull
I read at least one case where an exchange seized funds coming from hacking
into a site.

~~~
makomk
As far as I know, the exchange never released those funds.

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majorpatron
honestly this sounds more like silk road 2.0 is launching a campaign to rune
sheep marketplaces image to try to regain customers and vendors. i personally
think that sheep marketplaces web design is waay better than SR and BMR. they
are probably under attack by SR 2.0

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sheepmarket
175rsix7H365MJnRxzyZR8rbpiFAE32mN6

------
known
Cash = unlimited demand and unlimited supply

Bitcoin = unlimited demand and limited supply (21 million)

