Sheep Marketplace

Last updated
Sheep Marketplace
Logo of Sheep Marketplace.png
Type of site
Darknet market
Available in English
URLsheep5u64fi457aw.onion(defunct) [1]
CommercialYes
RegistrationRequired
LaunchedMarch 2013
Current statusOffline

Sheep Marketplace was an anonymous marketplace set up as a Tor hidden service. It launched in March 2013 and was one of the lesser known sites to gain popularity with the well publicized closure of the Silk Road marketplace later that year. [2] It ceased operation in December 2013, when it announced it was shutting down after a vendor stole $6 million worth of users' bitcoins. [3] [4] [5]

Bitcoin theft incident

In December 2013 Sheep Marketplace announced that one of the site's vendors exploited a vulnerability to steal 5400 bitcoins, valued at about $6 million at the time. [6] [7] According to Forbes and The Guardian, several users reported the site had started to block withdrawals of bitcoins more than a week prior to the theft. Users furthermore suggested the site's administrators held far more than 5400 bitcoins, pointing to records of a coincidental transfer of almost 40,000. [6] [7] [8] As users in the site's forums began to complain and discuss the possibility of connivance, administrators took the forum offline. [9]

Victims of the theft have attempted to identify the thief by sending "tagged" bitcoins to his accounts, using the public nature of bitcoin transactions to follow these moneys through the "blockchain" record of transfers. Within a couple days of the theft, a large amount of bitcoins were noticed being processed by Bitcoin Fog, a "tumbler" used to launder bitcoins by shuffling them between many accounts for a small fee. The size of the transaction, 96,000 bitcoins, caused Bitcoin Fog to fail, leaving the money traceable. [10] [11] Not long thereafter, the last known wallet of the user who had been presumed to be the thief was found to be a wallet owned by BTC-e, a large bitcoin currency exchange. This has led to speculation that the thief sent their money to the exchange in the hope of trading the coins for alternate crypto-currencies or moving to new wallets to further obfuscate their path. [12]

In March 2015 Czech police arrested a man suspected to be the Sheep Marketplace thief when he paid for an expensive house entirely in bitcoins. [2] [13] A nine-month investigation showed that he had made $800,000 of sudden purchases. [14] In October 2017 Tomáš Jiříkovský, the creator of the Sheep Marketplace, was sentenced to serve nine years in prison for stealing bitcoins from the market's users. [15]

In May 2016 two men from Florida were arrested after tracing Bitcoin transactions via Coinbase, [16] however the amount withdrawn was small compared to the total Sheep Marketplace theft. [14]

Related Research Articles

A cryptocurrency exchange, or a digital currency exchange (DCE), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may accept credit card payments, wire transfers or other forms of payment in exchange for digital currencies or cryptocurrencies. A cryptocurrency exchange can be a market maker that typically takes the bid–ask spreads as a transaction commission for is service or, as a matching platform, simply charges fees.

Bitcoin () is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software.

Silk Road (marketplace) 2011–2014 darknet market known for the sale of illegal drugs

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A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.

Mt. Gox

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Bitcoin network Peer-to-peer network that processes and records bitcoin transactions

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Charles Shrem IV is an American entrepreneur and bitcoin advocate. He co-founded the now-defunct startup company BitInstant, and is a founding member of the Bitcoin Foundation. In 2014 he was sentenced to two years in prison for aiding and abetting the operation of an unlicensed money-transmitting business related to the Silk Road marketplace. He was released from prison in 2016. In 2017, he joined Jaxx and served as its chief operating officer, and founded cryptocurrency advisory CryptoIQ.

The dark web is the World Wide Web content that exists on darknets: overlay networks that use the Internet but require specific software, configurations, or authorization to access. Through the dark web, private straphanger networks can communicate and conduct business anonymously without divulging identifying information, such as a user's location. The dark web forms a small part of the deep web, the part of the Web not indexed by web search engines, although sometimes the term deep web is mistakenly used to refer specifically to the dark web.

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Black Market Reloaded

Black Market Reloaded was a .onion hidden Tor website which sold illegal drugs and other illegal goods such as stolen credit cards and firearms. Its popularity increased dramatically after the closure of Silk Road, its largest competitor. In late November 2013, the owner of Black Market Reloaded announced that the website would be taken offline due to an unmanageable influx of new customers following the collapse of Sheep Marketplace and Silk Road.

Operation Onymous International police operation targeting darknet markets

Operation Onymous was an international law enforcement operation targeting darknet markets and other hidden services operating on the Tor network.

Evolution (marketplace)

Evolution was a darknet market operating on the Tor network. The site was founded by an individual known as 'Verto' who also founded the now defunct Tor Carding Forum.

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Atlantis was a darknet market founded in March 2013, the third such type of market, concurrent with The Silk Road and Black Market Reloaded. It was the first market to accept Litecoin.

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References

  1. "Archived copy". Archived from the original on 8 July 2017. Retrieved 1 September 2017.CS1 maint: archived copy as title (link)
  2. 1 2 O'Neill, Patrick Howell (27 March 2015). "Suspected Dark Net master thief busted trying to buy luxury Czech home". Daily Dot.
  3. Adrianne Jeffries (29 April 2013). "Drugs, porn, and counterfeits: the market for illegal goods is booming online". The Verge. Retrieved 2 December 2013.
  4. "Dark marketplace closes after theft of £3m in bitcoins". BBC News. 2 December 2013. Retrieved 2 December 2013.
  5. Mandala, Ravi (1 December 2013). "Silk Road-like Sheep Marketplace scams users; over 39k Bitcoins worth $40 million stolen". Techie News. Retrieved 2 December 2013.
  6. 1 2 Green berg, Andy (1 December 2013). "Silk Road Competitor Shuts Down And Another Plans To Go Offline After Claimed $6 Million Theft". Forbes. Retrieved 2 December 2013.
  7. 1 2 Hern, Alex (3 December 2013). "Online drugs marketplace shut down after £3.5m bitcoin hack". The Guardian. Retrieved 25 April 2014.
  8. Block chain record
  9. Sankin, Aaron (2 December 2013). "Sheep Marketplace scam reveals everything that's wrong with the Deep Web". Daily Dot.
  10. Edwards, Jim (3 December 2013). "A Thief Is Attempting To Hide $100 Million In Stolen Bitcoins — And You Can Watch It Live Right Now". SFGate. Retrieved 4 December 2013.
  11. "I just Chased him through a bitcoin tumbler, and when he Came out with 96,000 BTC, I was Waiting for Him..." Reddit. 1 December 2013. Retrieved 4 December 2013.
  12. Alex Hern. "Recovering stolen bitcoin: a digital wild goose chase | Technology". theguardian.com. Retrieved 22 December 2013.
  13. Blažek, Vojtěch (27 March 2015). "Jak se praly bitcoiny: Miliony z ciziny, vila napsaná na dědečka". Hospodářské Noviny.
  14. 1 2 "Archived copy". Archived from the original on 1 September 2017. Retrieved 1 September 2017.CS1 maint: archived copy as title (link)
  15. "Archived copy". Archived from the original on 3 April 2018. Retrieved 2 April 2018.CS1 maint: archived copy as title (link)
  16. Shin, Laura (30 May 2016). "Mystery Solved: $6.6 Million Bitcoin Theft That Brought Down Dark Web Site Tied To 2 Florida Men". Forbes. Retrieved 1 June 2016.