Bitcoin Heist: Millions Vanish from Online Black Market

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.

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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 site's numerous users, who used it to buy and sell their dubious wares.

"This vendor found bug in system and stole 5,400 BTC [about $5 million]—your money, our provisions, all was stolen," reads the message posted on the now-shuttered site's homepage. "We were trying to resolve this problem, but we were not successful."

Despite the message's promise that "all of current BTC will be distributed to users, who have filled correct BTC emergency address," it doesn't appear that any Sheep Marketplace users have received refunds.

That's all of the theft that can be confirmed. But the story doesn't end there.

Some believe that the thieves were Sheep Marketplace's administrators themselves, and that the whole marketplace was an elaborate scam.

A website called, set up before Sheep Marketplace's closing, lists what it claims to be evidence suggesting that the theft was an inside job.

Sheep Marketplace users weren't able to withdraw Bitcoins for up to a week before the site's 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 site's shutdown on Dec. 1, withdrawals still hadn't been enabled. alleges that many of Sheep Marketplace's 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, 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, that's more than $43 million — far more than the originally reported 5,400 BTC, or $5 million.

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Finally, a pair of Reddit users say they've 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 Marketplace's closing.

A site called Black Market Reloaded blocked new members, saying on its forums that Tor-based anonymous websites aren't 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 can't 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.

"Don't worry, we don't rip [off] anyone and will be back stronger than ever," wrote another administrator called LeContog in the same thread.

Email or follow her @JillScharr and Google+. Follow us @TomsGuide, on Facebook and on Google+.

Jill Scharr is a creative writer and narrative designer in the videogame industry. She's currently Project Lead Writer at the games studio Harebrained Schemes, and has also worked at Bungie. Prior to that she worked as a Staff Writer for Tom's Guide, covering video games, online security, 3D printing and tech innovation among many subjects. 

  • house70
    Can't say I feel particularly sorry for them. Like they say, if you get in the trough you might get eaten by the pigs.
  • meowmix44
    The silk road is back and strong, they waited for the FBI to back off then resumed their usual business.
  • palladin9479
    And this is the downside to using unregulated currency like BTC. It's decentralized and unregulated so governments can't do anything with it, they also can't protect you from the people who will scam you.
  • SirGCal
    Protect them? From a narcotics site? Their money was bunk the second it went online. I just don't understand the 'drug' people, feeding off the weakness of others for a buck. Makes me sick. But then to think that the same people stole from their buyers... makes me laugh. That's exactly the same mentality that got everyone to that site to begin with so where's the surprise?!?
  • happyballz
    And how is this any different from government currency? Like they would be able to find your money if stolen from the house, bank or better yet government's vault. "Regulated" has nothing to do with security of your money or them being able to "protect" your cash on-hand. FDIC only can "guarantee" up to $100k which is peanuts in the grand-scheme of things.
    The only difference is bitchoin "banks" if you will... have absolutely no credibility and are not reliable -more to do with the place than the currency.
  • Shaun o
    There will always be people ready to con you out of your money be it hard earned, gifted ect, collected.

    Greed, power, corruption, theft follow it
    Any form of money, or currency.
    Welcome to the world of "Computer says no Bitcoin."

    Like all things in life the only faith and trust you have is in just yourself. You just like to think you have it in other people.
  • spartanmk2
  • p05esto
    Yea, can't say I trust bitcoins at all... with that said I WISH I picked up a hundred of them at the low and sold today. Grrr that really sucks. Woulda Coulda Shoulda
  • Cazalan
    All currency is virtual at this point. Your local bank and credit cards just have some basic protections built in against theft.

    With any investment you never want to have it all in 1 place.
  • Wixman
    Just got ripped off by their drug dealer. Boohoo. Not a surprise... nor should it be. It's so easy to do from behind a computer that people tend to forget that they're, technically, breaking the law. If you have to use an ANONYMIZER to do it, it's pretty damn likely that you shouldn't be.