Bitcoin 'exit scam': deep-web market operators disappear with $12m

Bitcoin and money

The administrators of a top deep-web marketplace have disappeared with over $12m worth of the cryptocurrency Bitcoin, it emerged last night, in what appears to have been an “exit scam”.

On the website Reddit, a user called NSWGreat, who identified him- or herself as a moderator for the site, raised the first red flag in a post to the DarkNetMarkets subreddit marked “EVOLUTION EXIT SCAM”.

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“I hate to be the bearer of bad news, but I’ve been suspicious the past few days,” the user wrote.

“I have admin access to see parts of the back end, the admins are preparing to exit scam with all the funds. Not a single withdrawal has gone through in almost a week.”

NSWGreat said that he or she personally had $20,000 in Bitcoin currently in escrow at the site, and had confronted Evolution’s administrators – who go by the aliases Verto and Kimble – on Tuesday night. They then confirmed the scam, according to NSWGreat.

“I am so sorry, but Verto and Kimble have fucked us all,” NSWGreat wrote.

Less than an hour later, the site had vanished.

In an update, NSWGreat said: “Servers have gone down, including back up server for staff. I’m sorry for everyone’s losses, I’m gutted and speechless. I feel so betrayed.”

Evolution Marketplace was one of the largest of a number of deep-web sites which grew up after the collapse of the Silk Road, which was shut down after its administrator, Ross Ulbricht – who went by the alias Dread Pirate Roberts – was arrested in 2013.

But while Ulbricht’s Silk Road, and many of the sites that followed in its footsteps, had a quixotic if libertarian bent, Evolution was always known as more anarchic and less scrupulous.

One vendor on Evolution, speaking anonymously to the Guardian, said they had been on the site for two years. “Now it’s gone; I just lost my career,” they said, adding that they had lost around $5,000 in the scam.

Another vendor, also speaking to the Guardian anonymously, said that they had lost $50,000 worth of Bitcoin and felt “absolutely terrible”.

“I have lost everything I had worked for over the past year. That was my retirement fund,” the user said.

On Tuesday night, hundreds of users took to Reddit to vent their frustrations at the scam, some even talking about hiring hit-men to murder Verto and Kimble. “After you kill them, fuck them. Fuck them in the ear,” one user wrote.

The scam may well have serious consequences for users. One wrote that he owed money to drug dealers in real life. “I think they will start breaking toes,” the user wrote. “I’m shaking.”

Others were more philosophical. One user – who told the Guardian that they had lost money they had in escrow for a deal on a hacked Xfinity cable account and some “liquid shrooms” – said it “sucks for the people that lost thousands”.

“Peeps are screwed,” the user said, “but all part of the game I guess.”

The plot thickened as the evening went on. One user who goes by DeepThroat told Verto and Kimble on Reddit that they had 24 hours until he would start giving their identities to other users so that they could take revenge.

DeepThroat posted a screenshot purporting to be from the thieves, offering $5,000 in exchange for silence, which was posted to Reddit with the reply: “Fuck you.”

Revealing identities – a process known as “doxxing” – is utterly taboo in deep-web circles. However, DeepThroat implied in posts that the situation called for extreme measures. “Doxxing is forbidden and crossing that line is I don’t even know what. But in this case pressure has to be applied for them to realise they can’t walk away from this unscathed,” DeepThroat wrote.

“If the consensus is for me to fuck off let it be, OK then. I don’t think it’s fair for people to be robbed like this.”

The Guardian has contacted DeepThroat to verify the claims, but has not yet received a response.

Powered by Guardian.co.ukThis article was written by Nicky Woolf in New York, for theguardian.com on Wednesday 18th March 2015 16.27 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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