[2013-12-02]Sheep Marketplace turns out to be a scam (nearly 40K BTC!)

[Jamievs]

I could not find a topic about this yet, but it is seems worth mentioning.. Looks like the silk road follow up is a scam..

source: http://bitcoinblogger.com/sheep-marketplaces-users-fleeced-39918-btc/

Check out this Bitcoin wallet right here: 1EiVHZnDVjFH6Tic1YmWUSfYmVUnUZdnMU

There are exactly 39,918 Bitcoins sitting there; at current Coinbase buy prices, that is roughly $46 million.

Maybe some readers are scratching their heads right now and asking: “What is Sheep Marketplace? A market for Sheeple?”

Sheep Marketplace is one of the many Silk Road copycats that arose after the US Government takedown of Silk Road in the beginning of October.

Weeks ago, the admin of Sheep Marketplace announced that withdrawals would be closed for a few hours as a site-wide Bitcoin tumbler was being implemented.  Sheep Marketplace users were eager for the new tumbler to be built into the site and were patiently waiting.  In the last few days, many Sheep Marketplace users have been following their funds move from their accounts where they were deposited to other wallets aro

Weeks have passed.

Sheep Marketplace’s forums have been closed, but the site remains up and “operating” without withdrawals.

However, before the forums were closed a few of the top moderators on the forum began confirming the scam.  Screenshots taken from the forum show messages by forum moderators ctrlaltweed and The Sheppard that confirm Sheep Marketplace’s admin’s stark silence.

The most vocal of Sheep Marketplace’s victims have claimed that the Forum was shut down to prevent users from finding out about the scam; further more, they posit that the TOR accessible site is still running to catch unsuspecting depositors that do not use the forums and may be unaware that Sheep Marketplace is essentially insolvent.  The Sheeple at Sheep Marketplace (is it OK to call them Sheeple now?) are resorting to innovative methods to warn unsuspecting users, such as having vendors update their listings with pictures informing users of the ongoing scam.

If Sheep Marketplace’s shadiness triggers any memories for any of you, maybe you’ve seen this post on reddit from a month and a half ago.  Reddit user /u/theduded23 traced some internet mojo associated with Sheep Marketplace’s TOR address to the clearweb address www.sheepmarketplace.com definitively back to a single IP in the Czech Republic.  That is even more embarrassing then the personal email signup that tied the real life identity of Ross Ulbricht to Silk Road’s Dread Pirate Roberts.  Wary and intelligent users heeded this warning and chose to avoid Sheep Marketplace like the plague and it seems their decision was indeed a wise one.

There are currently international drug lords on the trail of a middle-aged Czech skilled in web development but perhaps lacking in online security; anonymous postings have surfaced on the Deepweb offering tens of thousands of dollars for personal identifying information about the missing admin of Sheep Marketplace.  What will happen to him when he gets caught is anybody’s guess.

The fact of the matter is we may never know what happens to this anonymous head of the Sheep Marketplace.  It is even possible that malicious actors initially tracked him down and forced him to steal all of his loyal users’ funds.  Either way, Sheep Marketplace’s users, mods, and vendors are not going to be seeing their funds ever again.

If Sheep Marketplace somehow comes back from this debacle, I”ll let you know as well.

Update:

For some in depth information of the developments, check out deepdotweb’s in-depth write-up.

Sheep Marketplace’s admin has been “doxxed” as: Tomáš Jiřikovský

[drrussellshane]

Gee, imagine that... a place called "Sheep Marketplace"....


 

[EvilPanda]

Drugstore down and markets dip immediately. The less of those silkroad clones the better for B.

[P_Shep]

Don't need the FBI, these sites are doing a great job shutting themselves down and reducing future trades on new sites. Seriously, who's going to trust these sorts of sites now? (who trusted them in the first place!?)

[beetcoin]

the only kind of people who could not see this coming were... the people who were looking for their next score.

[XBBlade]

Don't need the FBI, these sites are doing a great job shutting themselves down and reducing future trades on new sites. Seriously, who's going to trust these sorts of sites now? (who trusted them in the first place!?)

Well the real silk road appeared to be 'legit'.

[Kiki112]

god damn, I  had 0.18 BTC there  
should of spent it faster..

[beetcoin]

whoa, so the admin was doxxed.. if someone else could find out his identity, i'm sure the FBI knew about him already as well.

here is his facebook https://www.facebook.com/nadsamec

this guy has a lot of money now, but he's also fucked.. so many druggies and vendors are pissed and want their damn money back. LOL do you guys see his profile pic? he's grabbing the girl's tit in the 3rd picture  

[XBBlade]

whoa, so the admin was doxxed.. if someone else could find out his identity, i'm sure the FBI knew about him already as well.

here is his facebook https://www.facebook.com/nadsamec

this guy has a lot of money now, but he's also fucked.. so many druggies and vendors are pissed and want their damn money back. LOL do you guys see his profile pic? he's grabbing the girl's tit in the 3rd picture  

Lol if this is for real he has troubles.

But I have a question, if you have this many coins. How do you get it changed into real (or better said approved) money?

[beetcoin]

whoa, so the admin was doxxed.. if someone else could find out his identity, i'm sure the FBI knew about him already as well.

here is his facebook https://www.facebook.com/nadsamec

this guy has a lot of money now, but he's also fucked.. so many druggies and vendors are pissed and want their damn money back. LOL do you guys see his profile pic? he's grabbing the girl's tit in the 3rd picture  

Lol if this is for real he has troubles.

But I have a question, if you have this many coins. How do you get it changed into real (or better said approved) money?

maybe he can pay the mafia in BTC for some protection. they'd probably just kidnap and torture him for his wallet though. he is fucked, real fucked.  

[bitcoinpsftp]

whoa, so the admin was doxxed.. if someone else could find out his identity, i'm sure the FBI knew about him already as well.

here is his facebook https://www.facebook.com/nadsamec

this guy has a lot of money now, but he's also fucked.. so many druggies and vendors are pissed and want their damn money back. LOL do you guys see his profile pic? he's grabbing the girl's tit in the 3rd picture  

Lol if this is for real he has troubles.

But I have a question, if you have this many coins. How do you get it changed into real (or better said approved) money?

maybe he can pay the mafia in BTC for some protection. they'd probably just kidnap and torture him for his wallet though. he is fucked, real fucked.  

I'd think you'd first put it in a mixer and split the money up in who knows, maybe 100 different wallets.  Then you'd go on forums such as this one, looking for private buyers who want to buy large chunks of bitcoins (say 30+) at a 5% discount to Mt Gox.  You could probably turn a lot of that BTC to fiat pretty fast.

[tvbcof]

So who, if anyone, was Tomas here on bitcointalk.org?  It's always fun to retro-actively spot a criminal.  I remember 'Tom Williams' because I looked at some of his Bitcoin porting work to get the code running (or just a Makefile at that time actually but later I needed to include a differnt header file or something.)  Now I don't remember his handle here.  Oh ya...mad-hatter or some such.  I also remember spotting ~altoid's query for a developer in passing.  Didn't think much of it at the time.

[beetcoin]

turns out it was closer to 90k btc.. that's a shitload of money. i didn't know sheep marketplace was that big.

[repentance]

reddit's been tracking the BTC (it's actually over 96,000 BTC).  Turns out it's not all that easy to tumble a quantity that large.

Nobody has definitely tracked down the site admin/s yet.  So far, it hasn't been possible to establish whether the names people have uncovered belong to those who were actually operating SMP.

The reddit threads have the most up to date information.

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

http://www.reddit.com/r/SheepMarketplace/comments/1rxjsc/ji%C5%99ikovsk%C3%BDs_girlfriend_made_a_statement_on_her/#

[franky1]

of course drug users will get scammed. what are they going to do, call the cops and explain they lost money in a drugs deal.

+1 for a scam that makes bitcoin more legitimate

[beetcoin]

of course drug users will get scammed. what are they going to do, call the cops and explain they lost money in a drugs deal.

+1 for a scam that makes bitcoin more legitimate

how in the world does this make bitcoin any more legitimate? it'll make drug dealers think twice about leaving their coin in their accounts at least.. but it doesn't make anyone say "yeah, bitcoin is a good investment because druggies got screwed over."

[repentance]

of course drug users will get scammed. what are they going to do, call the cops and explain they lost money in a drugs deal.

+1 for a scam that makes bitcoin more legitimate

how in the world does this make bitcoin any more legitimate? it'll make drug dealers think twice about leaving their coin in their accounts at least.. but it doesn't make anyone say "yeah, bitcoin is a good investment because druggies got screwed over."

It's not going to make people think twice about leaving money on these sites, any more than the many losses people have suffered through wallet services and exchanges failing/disappearing into the void have stopped people leaving their BTC in the control of others. 

BTC held on third party sites are always at risk of loss, no matter how much you trust the operator.  They could be seized by law enforcement or the site could be hacked.

Yeah, vendors have lost a lot of money, but for many it's a cost of doing business and the overall risks of online business are still less than the overall risks of being a bricks and mortar vendor.  Funds in escrow will always be vulnerable.

[beetcoin]

of course drug users will get scammed. what are they going to do, call the cops and explain they lost money in a drugs deal.

+1 for a scam that makes bitcoin more legitimate

how in the world does this make bitcoin any more legitimate? it'll make drug dealers think twice about leaving their coin in their accounts at least.. but it doesn't make anyone say "yeah, bitcoin is a good investment because druggies got screwed over."

It's not going to make people think twice about leaving money on these sites, any more than the many losses people have suffered through wallet services and exchanges failing/disappearing into the void have stopped people leaving their BTC in the control of others.  

BTC held on third party sites are always at risk of loss, no matter how much you trust the operator.  They could be seized by law enforcement or the site could be hacked.

Yeah, vendors have lost a lot of money, but for many it's a cost of doing business and the overall risks of online business are still less than the overall risks of being a bricks and mortar vendor.  Funds in escrow will always be vulnerable.

i'm still not sure how that makes bitcoin more legitimate. and to me at least, the guy who robbed those people is way more fucked up than people who honestly sell their drugs (or people who are looking to score some). i don't know why buyers would put a lot of coin into their accounts, but i guess they're probably high on drugs so "safety" isn't a big concern to them.

[jellies]

vendors account for the bulk of the stolen coins. Apparently the site made some feeble excuse and ceased vendor withdrawals for a week. That is a lot of escrow build up. Some social engineering with a trusted vendor or two kept things from going pear shaped too fast, and then they made off with all the escrow when the jig was up.

Before people say well it is a problem peculiar to pathetic junkies, the same thing could happen to anything in the BTC world that is very popular: An E-commerce site, a tumbler, e-wallet service, btc exchange, you name it.  With sufficient incentive (a lot of btc in transit and a spike in price) the same thing could happen either on purpose or opportunistic or a hack, of course.

[repentance]

vendors account for the bulk of the stolen coins. Apparently the site made some feeble excuse and ceased vendor withdrawals for a week. That is a lot of escrow build up. Some social engineering with a trusted vendor or two kept things from going pear shaped too fast, and then they made off with all the escrow when the jig was up.

Before people say well it is a problem peculiar to pathetic junkies, the same thing could happen to anything in the BTC world that is very popular: An E-commerce site, a tumbler, e-wallet service, btc exchange, you name it.  With sufficient incentive (a lot of btc in transit and a spike in price) the same thing could happen either on purpose or opportunistic or a hack, of course.

It was even more clever than that.  When withdrawals were suspended, they announced that there would be a minimum withdrawal of 1 BTC when withdrawals resumed and put up a "countdown timer".  So people with less than 1 BTC in their accounts who were silly enough to believe the bullshit about them implementing a tumbler actually deposited additional funds to their user balances so they could withdraw.  They didn't just get the escrow funds - they also got a whole heap of people to add additional funds to balances they were keeping on the site (one quite weird thing which a couple of redditors have noticed is that whoever is doing this seems to like whole numbers).

And yeah, it's only the total losses which are larger in the drug marketplaces because of the sheer amount of BTC moving through it at any one time.  People continue to lose money by giving their BTC to third party services, including some which are operated by anonymous players.  There are multiple ways that user funds can be lost by any Bitcoin service which holds user funds, and that should never be forgotten.

The reddit chase is looking interesting at the moment.  It's not confirmed by others yet, but it looks like the main sheep wallet already contained a lot of BTC prior to SMP opening.  That may or may not help in identifying the person behind SMP.

http://www.reddit.com/r/SheepMarketplace/comments/1rzfue/the_main_sheep_wallet_contained_millions_from_a/

[niothor]

Since the 1000$ one in two business who deals with customers bitcoins gets "hacked".
And still , people trust some shady persons and deposit thousands and even millions of dollars just to wake up with nothing.

I 'm wondering what type of users are in the community: who have never been scammed or people who have lost some of their bitcoins  at least once.

[crazy_rabbit]

vendors account for the bulk of the stolen coins. Apparently the site made some feeble excuse and ceased vendor withdrawals for a week. That is a lot of escrow build up. Some social engineering with a trusted vendor or two kept things from going pear shaped too fast, and then they made off with all the escrow when the jig was up.

Before people say well it is a problem peculiar to pathetic junkies, the same thing could happen to anything in the BTC world that is very popular: An E-commerce site, a tumbler, e-wallet service, btc exchange, you name it.  With sufficient incentive (a lot of btc in transit and a spike in price) the same thing could happen either on purpose or opportunistic or a hack, of course.

True it could happen to anything, but it happens more often for businesses that are illegal themselves. You have a tough time going to the police and saying, "I'm a drug dealer and was scammed out of my drug money!"

I wouldn't be surprised if maybe this was some sort of a sting operation as well. The government would be smart to pull off stunts like this so as to completely destroy the faith of users in online "black marketplaces".

[Martijnvdc]

Who would have thought the inputs.io scam could be dwarfed?

[niothor]

vendors account for the bulk of the stolen coins. Apparently the site made some feeble excuse and ceased vendor withdrawals for a week. That is a lot of escrow build up. Some social engineering with a trusted vendor or two kept things from going pear shaped too fast, and then they made off with all the escrow when the jig was up.

Before people say well it is a problem peculiar to pathetic junkies, the same thing could happen to anything in the BTC world that is very popular: An E-commerce site, a tumbler, e-wallet service, btc exchange, you name it.  With sufficient incentive (a lot of btc in transit and a spike in price) the same thing could happen either on purpose or opportunistic or a hack, of course.

True it could happen to anything, but it happens more often for businesses that are illegal themselves. You have a tough time going to the police and saying, "I'm a drug dealer and was scammed out of my drug money!"

I wouldn't be surprised if maybe this was some sort of a sting operation as well. The government would be smart to pull off stunts like this so as to completely destroy the faith of users in online "black marketplaces".

Why bother? Greed is their ally! And Greed has no limits!
Also people trying to scam others are far more inventive than the CIA will ever be.

[niothor]

Who would have thought the inputs.io scam could be dwarfed?

In two years time we will talk about inputs like , oh that petty scam , take a look at this one , 1000x more , donkey market owner running out.

[Kiki112]

too many scams,damn you irreversibelity in donations