Bitcoin Forum

Hi,

I was reading an interesting article, most of you probably already know the story. But I wanted to share it anyway  ;D


http://bitforum.org/two-guys-on-reddit-are-chasing-a-thief-who-has-220-million-in-bitcoins/

Who's going to win the battle?!

I haven't heard of the story before, interesting read, thanks!

I think the thief should start sending small amounts to random active addresses, even member addresses found on this forum. That will make the number of address to monitor explode exponentially.

And why in the world would the thief do that?

To bankrupt or confuse the pursuers? After all, they can't keep sending and monitoring those 0.00666 BTC tracer transactions to every active wallet.

A french man cheated all of us in front of our nose, where we could not do anything and you expect to catch some anonymous thief ? :D

So he will have a higher chance of slipping some of the stolen coins through the surveillance into his real pocket. It is obvious that holding onto the bulk of the stolen coins makes it impossible to spend.


Exactly my point ;D

Well it also crossed my mind. If he knows he can not run and he probably can not give it back because they will hunt for him anyway. Maybe give it away in small portions to all of us?!

It would make him the most generous thief ever.

It's better for the thief to wake up 20 years from now with 1 billion dollars and their head intact, rather then 10 billion dollars and their head on a pike somewhere.

But then again, some people like to take their chances.

That said- tracking them will be childs play once google gets into the blockchain analysis game.

If I remember rightly, this story was a while ago, it turned out that the detectives had used their super sleuthing skills to track down, er, BTC-e's wallet.

This Google tracking is annoying. To foil Google, I think I will generate for myself N wallet addresses, where N is greater than the number of atoms in the Milky Way. Or should that be the number of ergs in the Solar System?

i laugh at these "trackers".

spending all their lives looking at blockexplorer.com thinking it will reveal the persons real life home address.

while the thief can make 20 usernames on 10 different exchanges. (200 accounts)

then
1. deposit 100 bitcoins
2. then go into profile settings of account and generate a new address.
3. repeat 1 & 2. four more times to  get 500btc into one account.
4. buy litecoin and withdraw to a litecoin address.

5. go to next account and repeat 1-4

now the "trackers" are seeing bitcoin is being moved, they see 100btc go to an address, and then get split up again. they think its the theif splitting it up, yet the reality if splits below 100btc are other people withdrawing from the exchange mixer.

so the "trackers" are watching all these very small bitcoin transactions, whilst the theif is now playing with litecoins and moving them to an exchange where he can cash out.

there are other coins such as 21coin 42coin 66coin, where their values are of multiple bitcoin. meaning that exchanges wont see as much of a alt coin grab event compared to grabbing thousands of litecoin.

From when is this article? 99,000 = $100mill? Even if they find thief what are they going to do to him, call the police on him? You can't do nothing to the person who stole your BTCs

What the heck OP, this article is from December last year!!!
http://www.businessinsider.com/220-million-sheep-marketplace-bitcoin-theft-chase-2013-12

imagine it. a person goes to the police and says
person: "i was on a blackmarket and deposited bitcoins to buy drugs. and someone stole my coins"
police: "so you buy drugs from a drug dealer........ interesting, step into my office i have some questions for you"

Brilliant :) Same thought about people that lost money on silkroad :)
Some SoB that sold drugs on his site stole my BTCs that I gave him for drugs and I never received them, I wanna sue him, or what ever.

And the prize " Idiot of the year " goes to < insert name > :)

Check this:

http://static1.businessinsider.com/image/529f8fab6bb3f76c4ddb2388-404-303/bitcoin-1.jpeg

Just one of his wallets. That means that this is not his first robbery. Probably this was the guy behind the SR 1.0 robbery as well. BTW... the chase was abandoned 4 months ago:

http://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_just_chased_him_through_a_bitcoin_tumbler_and/

Didn't the US IRS decide that bitcoin was not currency and labeled it as property?  If that's true, in your scenario wouldn't they be able to go to the police and say "i was on an online market and deposited bitcoins, or property per the IRS, to buy whatever i want.  and someone stole my property."

Now, I completely understand that the police will do jack-squat (Chris Farley voice), but doesnt someone have a legitimate claim if BTC is stolen to claim it as stolen property? 

Didn't know the story. Was surprised about the huge amount that was stolen. I always thought that sheepmarket was a minor operation compared to Silkroad.

Unfortunately I don't think the chase will be successful. There are too many options to hide tracks and the thief is unlikely to be an amateur. Sending BTC 0.00666 to every new address can quickly turn very expensive, too.

ya.ya.yo!

thanks for sharing. Interesting story :)

Digital thieves, digital detectives :) 2014 :)

The thief was not the smartest. He probably knows his script kiddy stuff, but he certainly didn't know his crypto-currencies. There were cast iron ways to pocket those coins without being chased through the block chain.

Where is proof that there was even theft involved?

Theft is a nice term used to try to cover up the stupidity of a person who exposes sensitive information, like their private key.

They can chase the "thief" all they want, they'll never see a single BIT of that coin ever again...

Someone stole the coins. Even if you leave the keys to your car in the ignition, it's still theft if someone takes it.

And no, those coins are gone. The only question is how much can the thief use without leaving clues to his identity.

Nice term... LOL. Even if he left the private key lying around, and someone stole it, it's still theft.
If you left your wallet on a bench and someone takes the money, it's not theft?
English problems.

The coins are gone forever, sad but true.

Lets say these cyber-detectives track some of these coins on to an exchange, where the thief is trying to sell them for fiat.  What are they going to do?  Contact the exchange/admins and say "there is a user on this site selling stolen coins".  The exchange wont do anything.  If the thief was remotely smart he'd sell them outside of an exchange, or like someone posted before launder them through alt coins and changed addresses (super easy to do).

If the admins do something, that would destroy the whole bitcoin system. Transactions are meant to be irreversible, authorized or not. If we make a special case for someone, more will follow.

Exactly.  I guess my question of what will they do was more of a rhetorical question.  It's a theft and a crime, but at this point there isn't anything these guys can do outside of luckily finding the person in real life and having some fun with him/her/them.

oh shit money laundering through altcoins o.o nicee..

ok lets talk about property. and lets convert blackmarket into the streets of detroit..

person: "hi officer i want to report a theft. i gave my TV, my car and my stereosystem to a drug dealer on the streets in exchange for drugs. i then found out that the tv, car and drugs were stolen and i cant now buy drugs of get my property back"

police: "so you were buying drugs... step this way"

property is property, and some dumb people will think that authorities will help out with any theft.. whether its financial or property. in my eyes.. people on drug websites should accept they will get extorted more so then on normal sites.. simply because.. you are dealing with criminals, and they know that the law wont help you. not because its property.. but because your doing a criminal act

that would be a good idea

very interesting chase :)   

what if the thief uses a mixer   ??? 

So if no one caught the theif then it just goes to show crime really does pay in crypto currency land!

If he sends them in small chunks to localbitcoins and sells them for cash, how will the people tracking him ever know they have been through LBC?

On the blockchain will the transactions just look like small amount of BTC moving to one address then out to another?

LBTC operates as a web wallet, so it's entirely possible that an LBTC address could be linked to them.

That is if you actually know how to steal them.

But the majority of BTC users who are in for profit don't really know how to protect their private keys anyways, you can attack from the weakest point.

In this case it can be safely assumed that a thief was involved. Because it is believed that the owner of Sheep Marketplace (someone from the Czech Republic) was the same guy who stole the Bitcoins from his customers and the SMP vendors. He didn't exposed any sensitive information. He just stole all the coins, just like what Mark Kerpeles did with Mt Gox.

not to be a dick or anything, but "cant do nothing" is a double negative. Sorry it bothers me xD

No chance , even by now i don think i heard any one got caught by stealing BTC

 interesting read, thanks!

And just imagine, jumping around from altcoin to altcoin. You can also use Darkcoin to really mess up the trail. And as the market caps gets bigger and bigger, laundering very large sums of money will get easier and easier.

"the two chasers began sending the thief tiny fractions of Bitcoins, specifically 0.00666 Bitcoins"


Well my guess is they are only giving him more coins to spend, they just can not keep dropping small amount on all new addresses.

nice read btw!

interesting article..didn`t hear the story before. Dam guys stop posting ideas of how to lose track of stolen coins..a lot of hackes happening lately, we must find solutions for this sh|t..it really is bad for bitcoin system..

Nope.... they deposited the coins in less than 100 wallets. That means that they spent less than 1 BTC. So not a very large sum for someone who has already lost BTC100 or BTC1,000 in the theft.

Great read. The thing is, this guy(s) just needs to make 1 mistake. It might not even be his mistake. e.g. The NSA gets their hands on the VPN provider, etc. and tracks him down.
Even years later tech might come out to do better tracking and if ANYWHERE along the line he made 1 mistake, that could be the straw that breaks him.

I think it is a matter of time before we start seeing some big thieves get busted. Also, Forensic analysis and analysts are not posting and are following. I think the thief gets nabbed.

IAS

ps - Thief, if you are listening, just donate the bitcoins to wikileakes and other disruptive technology firms...

If he wanted to donate them, he would have done so. If he needs ideas, here are some:

Donate some of them to Gox, that will made a lot of people happy. Start a faucet with random giveaways from 0.01 to 1 btc. Pick random members here and send them 1 btc...  :D

Both cases are risky for the thief. If he don't use a mixer, he will be immediately tracked. Especially true with the 2nd option.

What happens if the thiefs convert their bitcoins into zerocoins? wouldn't that make it pretty much impossible to find then

WOW, that's one hell of a story! Yeah, he must be the only person on the planet who wishes he didn't have so many Bitcoins  :)

The guys who receive the Bitcoins will try to exchange (at least some of) it for fiat, using an exchange. They will be caught there. Once they are caught, it won't take much time to find the guy who gave them the Bitcoins. (The exchanges need verification to a high level, to barter large amounts of coins, be it Bitstamp, or be it BTC-E).

Agreed. It is just a matter of time. When you steal soooo many coins, soooo many people are watching the movements.
And on top of that there are many Forensic guys that don't post here and are making it their pet project.
So, you have a guy injecting hit .000666 btc into every transaction they can find and others following with or without that.
Just a matter of time. They will slip up somewhere or a problem with the VPN, or just something unexpected...

The solution is to protect your own damn bitcoins.

All he has to do is send the coins to localbitcoins, sell them there, for cash, and he is golden.  Not rocket science.

You don't understand forensic computer science very well and so far the thief doesn't appear to either. This thief is moving a HUGE amount of mostly very traceable money.
One little slip up with ALL that money, just one, and/or one little assist from those with a "grasp" on TOR and what not  ;) , and he is caught. It may happen now, in a few months, or even years.
But, I'd say he is as good as caught.

Its About Sharing

I understand completely actually.

He sends the btc to a localbtc address.  There is no way that you know that the address he sends to is a localbtc address.  All you know is that he sent the coins to another wallet.  He sells for cash.  Localbtc transfers coins to buyer. 

How are you going to trace him?  You can keep following the coins, but you will be chasing the wrong person.

Hadn't heard about this, thanks for sharing though it's quite interesting haha.

For small amounts wouldn't tor browser with new exchange account sell for darkcoin. Then dark to lite work? I would find that extremely difficult to trace no?

It is super easy to wash any amount of coins.  Attach any amount of btc you want to it if you think that will help.  I guarantee I can make you lose the trail.

There are ways to find it out. Most of the localbitcoins wallets are tagged. Even if they are not, we can send alerts to the localbitcoins admins.

Another layer would be to exchange BTC for LTC or whatever and mix and echange and mix . yea good luck with that!

If I had some btc laying around, I would prove to you that you cannot trace coins for longer than 24 hours, if someone does not want you to.  This guy is just a moron.

Care to place a bet?  Have someone send me .01 btc, and then tag it however you want.  I bet you wont be able to trace it, and I will return it totally clean, no tumbler service needed.

^^ by : This guy is a moron, I was referring to the thief, not you.

First, there is a world of improvement needed for coin washing for starters. It is not quite there yet and when you are going to wash that many coins, which this guys hasn't done much of, you will still be able to follow them, just due to the amount.

bryant.coleman mentioned one possibility and if you think it ends there, there are for sure more. I can think of a few ways but will not post them here. No sense in helping the thief.  ;)

We are in the very early days and this guy has already left enough fingerprints imo that intelligence agencies (e.g. NSA) if they get involved, could probably already point him out. In a way, it is nice they didn't nab him as it give hope to other thieves.

I just don't think this one or few guys are as smart as the mass of computer experts following him around. He is going to make a mistake and get nabbed is my educated guess.

IAS

It would be great if somehow they managed to catch this guy but I just don't see it happening. There are too many anonymous exchanges out there where he could easily convert some BTC to an altcoin, move it around a bit and then later convert back to BTC if he wants. Sure, they can watch the blockchain but what happens after he sends some to BTER or BTC-e, converts to an altcoin and then moves the altcoins out?

I agree, they don't have a chance to track it down tbh.

search for him:

http://bitjuice.com/uploads/Mark_Karpeles_Flipping_13.JPG

Wouldnt even take that much or than many wallets.  Loss of ~1%, and 24 hours.  Simple.

Hm, that finger looks quite suspicious. I'm just kidding. I know it's photoshopped, and really bad at that.

I have mixed feelings on this one. On one hand, I don't like thieves and hope they get caught (I lost a significant amount on MtGox and would love to see some bastards in jail). On the other hand, I want bitcoin to be as anonymous as possible.

interesting article

The problem with cleaning so much money is that it just takes 1 Satoshi to bring things back to him, just 1.
And something further to consider is the laundering itself is going to leave a huge fingerprint moving so much around.
Perhaps a fair analogy is how the NSA can still track people who are using TOR because, in part, of TOR's latency. There is a similar, but much clearer fingerprint the thief is leaving as he moves coins around, cleaning or not. The depths at which Computer Forensics is capable of is mind blowing and then throw some big computers into the equation.

A bigger fear is that these intelligence agencies get their hands on the coins and don't tell us...

You honestly believe he can't swap out every satoshi out?  He doesn't have to.

You will never know of you have the right person, ever. You will end up tracking thousands of people, since they all will have some part of that little tag.  You can trick yourself into thinking you can find him....you won't.

Regarding washing, what I was saying is that nothing exists right now to wash so many coins thoroughly enough. But even beyond that...

Basically, what I'm saying is, there are so many variables involved (e.g. washing, TOR, VPN, etc.) that he/technology will either slip up somewhere or technology/people will intervene somehow. Might even be a close "friend", lots of money and the police asking questions does that...

Analogously, you hear this talk of side chains with bitcoins, perhaps replacing most alt coins. When the debate on this was going on a year or so ago, I tried to communicate that there would be some type of organic movement that would happen, but it was a bit beyond my event horizon, word wise. I didn't have the words or the direct vision for it. I see the same thing happening with this particular area, this theft, because of the amount involved.

Couldn't he just start a site and sell/auction off his tainted coin at a discount? It would cost a fair amount, but with enough turnover he could "tumble" a massive amount and start converting to fiat from a random wallet while pretending to be just another tumbler customer.

It is more like "Two guys chasing dragon" or "Two guys visiting broke-back mountain". If done properly then coins are untraceable. The key work is Properly. It requires deep technological knowledge in bitcoin and anonymity technology as well as understanding how investigation and spy tradecraft works.

You don't gotta wash them at all. Swap them. Its so easy to do.

You guys are fooling yourselves.

Its going to be hard at this moment to clean so many coins, but then again why hurry if you have so many and have time.

I think he should donate them to here:

1KiuKpHcsM7gyW6rDKxBgEJui4Y68J82rX

 ;D

Ugh, don't do that man. You'll regret these posts if you're gonna be here for a longer period of time and wanna establish a good reputation in the community.

He could start a small exchange, grow it, sell some chunks of the money little at a time to buyers. Only the exchange owner knows who is the counter-part of the sale.

He could make them lose track of him as way earn more money. And if he thinks he got enough, he sells the exchange and go live.

I don't have the resources to conduct an extended chase and have no interest in doing so. But if you really want to trace them, then there are several ways to do so. As a first step, you can post the transaction IDs here in Bitcointalk, for everyone to see. You can alert all the major exchanges (including localbitcoins). That will make sure that the thief is unable to exchange the coins for cash, at normal rates.

The thieves should just buy a lot of mining power with legit money - say 10% of the hash rate in some DC in the Arctic Circle. Then make 1 Satoshi donations to random addresses on this forum with 1000 BTC transaction fees. Statistically they would get 10% percent of the dirty money back as pristine minted coins. On top of that they will still get the 25 BTC block rewards.

Five pages and nobody points this out? The "Sheep marketplace scam" wallet is BTC-E's hot wallet.

http://www.reddit.com/r/SheepMarketplace/comments/1s2upf/the_sheep_market_scam_address_does_not_actually/

Wow that dude is dedicated wonder how he will cash out

send all of it to a bitcoin eater address and watch the price explode.

Who will go for it? The thieves are greedy in the first place. Will they be ready to forget 90% of their loot? I don't think so. Even if they do something like this, people will definitely notice the BTC1,000 transaction fee. And they will also notice the new entrant in mining with a very significant and sudden 10% share of hash-rate. Traceable.  ;D

haha, I remember how I laughed in December on the two clowns ;D chasing a fairy
and chasing it while it was obvious they have trouble even "walking" in the blockchain
They didnt even bother to check for the most common addresses used by the biggest exchanges...

Just imagine you had the skillset that allowed you to hack at a tor market holding BTC. But you would suddenly have no idea on how to cover your tracks in the blockchain ( which takes little knowledge and time?).

It takes little common sense, a drop of creative thinking, 3 spoons of googling, about 12 hours of mixing through alts and mixers + sending random tiny amounts to random addresses and some patience with cashing out. No one, no matter how resourceful and determined, can tell what went where.

 I would bet that there was never more then say 30k BTC on Sheep at one time.
The real Sheep theft was probably much smaller.

Just means that the thief immediately converted his loot to fiat, using the BTC-E exchange. Had the exchange be a bit more co-operative, then the chasers would have actually caught the thief.

If that were true, my friend, and the thief was soo naive and stupid and he didnt use any of the above mentioned methods, you could just as well catch him now. The transactions are still in the blockchain, and it depends only on how much records BTC-e keeps. If someone dumped such a big amount at once, it would make it bloody obvious.

Think this argument makes the most sense you can backtrack and detect which person cashed out

Well this is piece of news is new to me even though it isn't straight off  the presses so to speak.  I like the idea of him sending coins to users of this forum to throw them off his track lol.  Thanks for sharing this story OP.

I was thinking if they stole btc and then mined btc, then pay btc plus with interest.  usually thieves wont have a good heart to that am i right?

Your welcome Counter!!!
So many different thoughts on the thief and also the chasers :D

Interesting story. If the thief was smart enough to steal so many bitcoins, he should be smart enough to confuse the pursuers and cover his tracks.
Send coins to exchange --> buy altcoins --> sell --> withdraw again to some other address = profit?

yea to me it wouldnt be that hard it doesnt seem to cover ones tracks with bitcoin. although maybe they could trace it to the site then notice when there is another xxxx btc transaction going back into a wallet. why doesnt this person just cashout its not like anyone can see where hes from or his address cause of annonymity

What about "mixing" services could they use that to totally throw off the pursuers?  I thought that's what mixing services were for.

they probally dont want to be outed or dont trust a mixing service wit hundreds of thousands. also dont want to pay 50% to wash their dirty money.