Topic: [2013-12-02]Sheep Marketplace turns out to be a scam (nearly 40K BTC!) (Read 3704 times)

too many scams,damn you irreversibelity in donations 

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.

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.

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

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".

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.

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/

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.

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.

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.

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."

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

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/#

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

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.

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.

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.  

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?

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  

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