Bitcoin theft takes down narcotics bazaar, some claim inside job

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A Sheep Marketplace operator posted a message to the Deep Web site stating that the theft of more than $6 million in bitcoins led to the shutting down of the illicit online drug bazaar this weekend.

Some users are not buying it – they believe the virtual heist was an inside job carried out by the Sheep Marketplace administrator that netted him close to $100 million in bitcoins.

"We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101," according to the Sheep Marketplace post, which states that all recovery efforts were unsuccessful and that remaining bitcoins will be distributed to users who have filled correct Bitcoin emergency addresses. "This vendor found a bug in the system and stole 5400 BTC - your money, our provisions, all was stolen."

Not everyone is convinced this is what transpired. Several users took to Reddit where the virtual finger was pointed at the Sheep Marketplace administrator – a Czech citizen named Tomáš Jiřikovský. The irate customers are saying that Jiřikovský siphoned funds from user accounts and used the attack story as a cover.

All Bitcoin transactions create a public ledger known as a blockchain and users identified one this weekend for 39,900 bitcoins, or close to $46 million, that they say is tied to Jiřikovský. One affected user followed the blockchains intently and accused Jiřikovský of having plundered closer to 96,000 bitcoins, or about $110 million.

Affected users may never get the actual story.

Bitcoins are a form of electronic money known as cryptocurrency because the virtual funds can be spent anonymously and securely. Bitcoin value has been skyrocketing in recent months and 5,400 bitcoins is currently assessed at roughly $6.2 million.

Sheep Marketplace is not the only recently downed black market website accessible via the Tor network – a network typically accessible through a modified version of Firefox where traffic is directed through thousands of relays to make internet tracking nearly impossible.

The FBI brought down Silk Road and its creator, Ross Ulbricht, in October and, following the demise of Sheep Marketplace, BlackMarket Reloaded operators decided they would be shutting down in a timely and orderly manner.

Meanwhile, November was not the best month for Bitcoin service providers and users.

Bitcoin eWallet Inputs.io was the victim of a hack that relieved the service of 4,100 Bitcoins, which translated at the time to about $1.1 million. About two weeks later, attackers stole 1,295 Bitcoins from Denmark-based Bitcoin exchange BIPS, which currently translates to about $1.5 million.

Ashley Carman contributed to this report.

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