8 ms·

Sheep Marketplace closes after theft of £3m in bitcoins

55 points by dirktheman 13y ago

iSnow 13y ago
It's more like $90m and it was the operator of the site (http://www.reddit.com/r/SheepMarketplace/comments/1ru5ir/founda_wallet_containing_98million_worth_of_coins/ http://www.reddit.com/r/SheepMarketplace/comments/1ru5ir/fou... and other threads in that subreddit)
- easy_rider 13y ago
  That's right. 5400BTC is stated. Blockchain has been tracked, and first estimate was around https://blockchain.info/address/1EiVHZnDVjFH6Tic1YmWUSfYmVUnUZdnMU https://blockchain.info/address/1EiVHZnDVjFH6Tic1YmWUSfYmVUn... And then another blockchain was tracked. (the 90m one) And transactions all end all being chopped up, and redistriuted, with the largest amounts going into wallets like this: https://blockchain.info/nl/address/1P7hjN2J119r2MoT14PwnvtNkvohScS3zi https://blockchain.info/nl/address/1P7hjN2J119r2MoT14PwnvtNk... This
  - judk 13y ago
    Is blockchain.info set up as an effective store of consensus around tracking "evil" addresses? If not, is anyone else doing that (publicly)? I am sure the NSA and cousins are studying the blockchain carefully.
    - easy_rider 13y ago
      Well, I don't own BTC myself, am not in the BTC community and I'm not NSA even :) But judging by what the internets says. Yeah, this seems to be the the case in the BTC community to monitor and track suspicious activity. I've also seen a 00666 BTC transaction being used as a community effort to mark the blockchain. The number in the amount should need no further elaboration for the intention. That
- smartwater 13y ago
  It's just some dude tweaking out on meth in that thread. Interesting to see the difference between traditional amphetamines and meth. The motivation seems to be there, but incoherent and full of conspiracy theories too.
minimax 13y ago
I'm not too worried about this since you can be pretty sure the aggrieved will probably be able to track down the thief by examining the block chain. That is one nice thing about bit coin: it exists outside financial regulation and so penalties for transgressions like this can be handled extrajudicially. My paycheck comes today and I'm really upset I have to pay rent and not just invest the whole thing in more bit coins.
- gizmo 13y ago
  > transgressions like this can be handled extrajudicially Is this code for vigilante justice?
  - this_user 13y ago
    Well, those SMP people stole money from drug dealers some of which may be part of or at least have ties to organised crime. I believe people like that have ways of dealing with something like this if know names and addresses.
    - deleted 13y ago
      [deleted]
  - minimax 13y ago
    What I mean is why let the innovation stop at the financial system when we can reinvent/streamline the judicial system as well!
    - deleted 13y ago
      [deleted]
    - danielweber 13y ago
      I upvoted you because I presumed your comment was satire.
      - judk 13y ago
jellicle 13y ago
Site operators retire to Cayman Islands. Bitcoin has been mostly good for promoting the Ponzi scheme style of business operation. Bitcoin businesses are divided into exactly two types: - those that have absconded with all customer funds - those that are planning to abscond with all customer funds
- gwern 13y ago
  > Site operators retire to Cayman Islands. The chance of that at this point is practically nil. The owner has been doxed, both the FBI and Czech police have been thoroughly notified, and the blockchain movements suggest the owner is panicking and no longer thinking straight (who on earth moves 96k btc through a mixer in a day? that shows they either don't understand the idea of mixing or they are too frantic to realize the futility of it).
  - throwaway0094 13y ago
    Owner has been doxed? Link?
    - Cederfjard 13y ago
      It was posted on here yesterday I think, but seems to have been removed. I hope posting this link is OK: http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitment_proof_of_knowledge_about_a/ http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitme...
    - berberous 13y ago
      Gwern (of gwern.net) released the information on PasteBin: http://pastebin.com/raw.php?i=9spTATw6 http://pastebin.com/raw.php?i=9spTATw6 Earlier HN discussion: https://news.ycombinator.com/item?id=6828620 https://news.ycombinator.com/item?id=6828620
  - michaelbuckbee 13y ago
    Real question: do the authorities even care? As in has there been a previous case of the FBI helping return bitcoins to their rightful owners?
tlrobinson 13y ago
These are some expensive lessons being learned. Bitcoin and other crypto can solve most of these problems. 2-of-3 multisig escrow transactions should be required on marketplaces.
obiefernandez 13y ago
If you want to understand the drama around the doxing of the site's owner and how it led him to run check out Gwern's comment here: http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitment_proof_of_knowledge_about_a/cdr9pe8 http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitme...
at-fates-hands 13y ago
What's the point of using BT if it isn't totally anonymous like people say it is? I thought the main draw of using BT is it's totally anonymous. I'm not being sarcastic at all either when I ask that.
- singlow 13y ago
  It is not anonymous, in the sense that the transaction history of a wallet is public info. If that transaction history can identify you, you are not anonymous. The point if bitcoin is that it is decentralized and no entity can affect or effect a transaction apart from the holder of the private key. As long as you can keep your key secret, no government or bank can seize your funds or prevent you from spending them. Anonymity is possible through laundering techniques that obfuscate the transaction history. But if you provide an address to the recipient of the coins or purchase the coins with a bank account, your anonymity is limited by the privacy protections of the person who ships your goods or of your bank. If you mine your coins or earn them in a way that does not require the disclosure of your identity and spend them at places that do not require any identifiable information, it is very anonymous.
  - at-fates-hands 13y ago
    Thanks for the clarification, it makes more sense to me now.
talles 13y ago
How many of those thefts will it take too see that we are not ready to really jump into bitcoin yet.

55 points by dirktheman 13y ago

iSnow 13y ago

It's more like $90m and it was the operator of the site (http://www.reddit.com/r/SheepMarketplace/comments/1ru5ir/founda_wallet_containing_98million_worth_of_coins/ http://www.reddit.com/r/SheepMarketplace/comments/1ru5ir/fou... and other threads in that subreddit)

easy_rider 13y ago
That's right. 5400BTC is stated. Blockchain has been tracked, and first estimate was around https://blockchain.info/address/1EiVHZnDVjFH6Tic1YmWUSfYmVUnUZdnMU https://blockchain.info/address/1EiVHZnDVjFH6Tic1YmWUSfYmVUn... And then another blockchain was tracked. (the 90m one) And transactions all end all being chopped up, and redistriuted, with the largest amounts going into wallets like this: https://blockchain.info/nl/address/1P7hjN2J119r2MoT14PwnvtNkvohScS3zi https://blockchain.info/nl/address/1P7hjN2J119r2MoT14PwnvtNk... This
- judk 13y ago
  Is blockchain.info set up as an effective store of consensus around tracking "evil" addresses? If not, is anyone else doing that (publicly)? I am sure the NSA and cousins are studying the blockchain carefully.
  - easy_rider 13y ago
    Well, I don't own BTC myself, am not in the BTC community and I'm not NSA even :) But judging by what the internets says. Yeah, this seems to be the the case in the BTC community to monitor and track suspicious activity. I've also seen a 00666 BTC transaction being used as a community effort to mark the blockchain. The number in the amount should need no further elaboration for the intention. That
smartwater 13y ago
It's just some dude tweaking out on meth in that thread. Interesting to see the difference between traditional amphetamines and meth. The motivation seems to be there, but incoherent and full of conspiracy theories too.

minimax 13y ago

I'm not too worried about this since you can be pretty sure the aggrieved will probably be able to track down the thief by examining the block chain. That is one nice thing about bit coin: it exists outside financial regulation and so penalties for transgressions like this can be handled extrajudicially. My paycheck comes today and I'm really upset I have to pay rent and not just invest the whole thing in more bit coins.

gizmo 13y ago
> transgressions like this can be handled extrajudicially Is this code for vigilante justice?
- this_user 13y ago
  Well, those SMP people stole money from drug dealers some of which may be part of or at least have ties to organised crime. I believe people like that have ways of dealing with something like this if know names and addresses.
  - deleted 13y ago
    [deleted]
- minimax 13y ago
  What I mean is why let the innovation stop at the financial system when we can reinvent/streamline the judicial system as well!
  - deleted 13y ago
    [deleted]
  - danielweber 13y ago
    I upvoted you because I presumed your comment was satire.
    - judk 13y ago

jellicle 13y ago

Site operators retire to Cayman Islands. Bitcoin has been mostly good for promoting the Ponzi scheme style of business operation. Bitcoin businesses are divided into exactly two types: - those that have absconded with all customer funds - those that are planning to abscond with all customer funds

gwern 13y ago
> Site operators retire to Cayman Islands. The chance of that at this point is practically nil. The owner has been doxed, both the FBI and Czech police have been thoroughly notified, and the blockchain movements suggest the owner is panicking and no longer thinking straight (who on earth moves 96k btc through a mixer in a day? that shows they either don't understand the idea of mixing or they are too frantic to realize the futility of it).
- throwaway0094 13y ago
  Owner has been doxed? Link?
  - Cederfjard 13y ago
    It was posted on here yesterday I think, but seems to have been removed. I hope posting this link is OK: http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitment_proof_of_knowledge_about_a/ http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitme...
  - berberous 13y ago
    Gwern (of gwern.net) released the information on PasteBin: http://pastebin.com/raw.php?i=9spTATw6 http://pastebin.com/raw.php?i=9spTATw6 Earlier HN discussion: https://news.ycombinator.com/item?id=6828620 https://news.ycombinator.com/item?id=6828620
- michaelbuckbee 13y ago
  Real question: do the authorities even care? As in has there been a previous case of the FBI helping return bitcoins to their rightful owners?

tlrobinson 13y ago

These are some expensive lessons being learned. Bitcoin and other crypto can solve most of these problems. 2-of-3 multisig escrow transactions should be required on marketplaces.

obiefernandez 13y ago

If you want to understand the drama around the doxing of the site's owner and how it led him to run check out Gwern's comment here: http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitment_proof_of_knowledge_about_a/cdr9pe8 http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitme...

at-fates-hands 13y ago

What's the point of using BT if it isn't totally anonymous like people say it is? I thought the main draw of using BT is it's totally anonymous. I'm not being sarcastic at all either when I ask that.

singlow 13y ago
It is not anonymous, in the sense that the transaction history of a wallet is public info. If that transaction history can identify you, you are not anonymous. The point if bitcoin is that it is decentralized and no entity can affect or effect a transaction apart from the holder of the private key. As long as you can keep your key secret, no government or bank can seize your funds or prevent you from spending them. Anonymity is possible through laundering techniques that obfuscate the transaction history. But if you provide an address to the recipient of the coins or purchase the coins with a bank account, your anonymity is limited by the privacy protections of the person who ships your goods or of your bank. If you mine your coins or earn them in a way that does not require the disclosure of your identity and spend them at places that do not require any identifiable information, it is very anonymous.
- at-fates-hands 13y ago
  Thanks for the clarification, it makes more sense to me now.

talles 13y ago

How many of those thefts will it take too see that we are not ready to really jump into bitcoin yet.