There's a £60m Bitcoin heist going down right now, and you can watch in real-time

Sheep Marketplace closed down over the weekend after someone got away with 96,000 bitcoins - and angry users are chasing him around the internet.

One of the largest heists in bitcoin history is happening right now. 96,000 bitcoins - that’s roughly £60m as of the time of writing - was taken from the accounts of customers, vendors and administrators of the Sheep Marketplace over the weekend.

Sheep was one of the main sites that came to replace the Silk Road when it closed in October, but it too has now closed as a result of this theft. It’s a little hard to work out exactly what’s happened, but Sheep customers have been piecing it together on reddit’s r/sheepmarketplace.

Here's what happened: someone (or some group) managed to fake the balances in peoples’ accounts on the site, showing that they had their bitcoins in their wallets when they’d actually been transferred out. Over the course of a week the whole site was drained, until the weekend when the site's administrators realised what was happening and shut everything down.

Originally it was thought that only 5,200BTC - or £3m - was taken, with a message posted on Sheep's homepage blaming a vendor called "EBOOK101" for finding and exploiting a bug. However, over the weekend it became clear that the amount stolen was much, much larger.

In a normal robbery that money would be gone by now, but it isn't. Bitcoin is pseudonymous, not anonymous, and bitcoins can’t just disappear. It works because each and every transaction is public and visible to each and every other person using the Bitcoin network, and a person is only as anonymous as their link to their wallet.

A couple of reddit users realised that the sheer size of the heist makes “tumbling” the coins - the normal method of laundering bitcoins - impossible, as long as they kept on their toes. Someone with bitcoin can send some to a tumbler like bitcoinfog, where it will be split into smaller subdivisions and mixed with other bitcoins from other places, recombining and splitting again several times over until the whole amount eventually comes out the other end, theoretically in such a way that it’s impossible to track. Silk Road’s in-built tumbler successfully foiled the FBI, allegedly.

However, reddit user TheNodManOut managed to track where the first bunch of transfers out of Sheep went, and from there and silkroadreloaded2 worked out which tumbler that the thief was using. Here’s how silkroadreloaded2 describes what’s happened since (“Tomas” is the alleged owner of Sheep, and one of the suspects for many users):

All day, we've been chasing the scoundrel with our stolen bitcoins through the blockchain. Around lunchtime (UK), I was chasing him across the roof of a moving train, (metaphorically). I was less than 20 minutes, or 2 blockchain confirmations, behind "Tomas".

He was desperately creating new wallet addresses and moving his 49 retirement wallets through them, but having to wait for 3 or 4 confirmations each time before moving them again. Each time I caught up, I "666"ed him - sent 0.00666 bitcoins to mess up his lovely round numbers like 4,000. Then,all of a sudden, decimal places started appearing, and fractions of bitcoins were jumping from wallet to wallet like grasshoppers on a hotplate without stopping for confirmations.

Shit!

He was tumbling our stolen bitcoins a second time, and a tumbler is unbeatable....

Unless you guess which one it is, nearly all the coins belong to the person you're tracking, jump in with him, and get jumbled up through the same wallets using the same algorithm. I was hopping from foot to foot shouting "come on!" at my laptop, waiting an age for 6 blockchain confirmations to get 0.5 btc into "bitcoin fog". My half a bitcoin got sliced and diced through loads of wallets and I followed the biggest chunk with blockchain.info - along with 96,000 stolen ones!

Or, in other words:

He gathered 96,000 in one pot, then split it into about 50 smaller ones. then he saw me 666ing them all. Imagine a sports stadium with 96,000 people in it, each with $1000.

He sent them all via different routes all over the world, but the same 96,000 people then arrived at a different stadium and he went to bed.

Now there are 96,001, and I just phoned you on my mobile to tell you where the stadium is.

A major problem with tumblers is that they only work with lots of bitcoins coming and going from a lot of different sources - if a tumbler is taking in 96,000 bitcoins, those will massively outnumber all other bitcoins being tumbled and it’ll be easy to spot them coming out the other end. Mix in a little of your own with all those other ones and you'll find out the wallet addresses that the tumbler uses, and it should be easy to spot large transactions splitting off from there.

The fascinating consequence of this is that you can see the stolen bitcoins on the public blockchain, and as long as there are people keeping tabs on it there’s going to be no way for the thief to cash in on their haul. Considering how people rely on tumblers to maintain anonymity when buying illegal stuff online, this unusual loophole is something of a revelation.

Right now, as you’re reading this, you can watch as the the thief starts trying to move their bitcoins on again - it’s currently down to 92,000 bitcoins and dropping as smaller chunks begin going out. Selling those bitcoins and turning them into cash is going to be extremely difficult, as the major Bitcoin exchanges all demand proof of identity (specifically to avoid charges that they're involved in money laundering), and if they're broken down into smaller quantities to sell via a site like localbitcoins.com a paper trail will still be generated. As soon as it's possible to link one real-life bank account or identity to any bitcoins from that stash, it will be possible to work out their real-life identity.

This counts as one of the largest robberies in history at Bitcoin's current market value, ranking in the same company as real-life thefts like the $108m diamond theft at the Harry Winston store in Paris in 2008. 96,000 bitcoins also places the thief as one of the wealthiest Bitcoin millionaires on the current rich list (but bear in mind that few serious Bitcoin players keep their currency in just one wallet) - and all without having to go to the trouble of wearing balaclavas or threatening someone with a gun.

Let's watch and see what happens next.

Some fan-made physical bitcoins. (Photo: antanacoins/Flickr)

Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman.

Flickr: M.o.B 68 / New Statesman
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“I begged him to come home”: Breaking the taboo around texting the dead

Many people text dead loved ones to cope with their grief – but trouble arises when they get an unexpected reply. 

A month after Haley Silvestri’s dad died from a heart attack, she texted him begging him to come home. In the middle of the night Silvestri’s 14-year-old sister had found their father, with his lips and mouth blue, lying on the kitchen floor. “There was nothing there anymore, just a dead body,” Silvestri says. “My father had his first heart attack months before and seemed to be doing OK. Then, this happened.”

In the very first episode of CSI Miami’s seventh season, the protagonist – Horatio Caine – fakes his death. For the first 15 minutes of the episode, the viewer believes the character is truly dead, as the camera lingers on Horatio’s body face down on the tarmac.

Silvestri and her father used to enjoy watching the show together. After he had passed and she realised she would never see her “best friend” again, she picked up her phone. “I texted my dad begging him to come home,” she says. “I begged my dad to please be ‘pulling a Horatio’.”

"My heart was broken and I was bawling as I texted her over and over" 

In texting her father after he had died, Silvestri is by no means unusual. No official figures exist for the number of people who use technology to message their deceased loved ones, but Sara Lindsay, a professional counsellor, clinical supervisor, and trainer, says it is “more common than we think”.

“I see it as a modern and contemporary part of the grieving process,” she says. “I think in a way it's very similar to visiting a graveside, in that the bereaved are reaching out, particularly in the early days, because it takes a long time for people to process the reality that this person has now gone.”

Karlie Jensen, 18, texted her friend immediately after she found out she had died in a car accident. “I texted her as soon as I woke up to the news from my mom that she had passed. My heart was broken and I was bawling as I texted her over and over waiting for a text saying it wasn't her, that my mom didn't know all the facts, and maybe she was just hurt.” Jensen also called her friend and begged her to respond. “I did it because I couldn't let go and couldn't accept she was gone from my life forever,” she says. Karlie continued to text her friend while also calling her voicemail in order to hear the sound of her speaking again. 

Karlie (right) and her friend

After her first text to her deceased father, Silversti also began texting him once a week. She fell into depression, and on her worst days messaged the number. “I think it helped initially because it felt like I was personally writing a note to him, that I knew he only was gonna see,” she says. “I did it because it was my attempt at pretending he was still here and could text me back.”

Lindsay, who has over a decade’s experience of bereavement counselling, emphasises that this behaviour is in no way unhealthy. “I think on the whole it's a very healthy part of grieving, particularly in the first year where the bereaved faces agonising days without their loved ones,” she says. “There is just so much loss and change in their life that’s out of their control, I see this aspect of texting as a small way of being able to reach out and alleviate that pain. That person is suddenly now not there but how they feel about that person hasn't changed.”

"I was going through my phone and I saw his number – I wanted to delete it, but I hesitated I thought maybe I could send a text"

Despite being normal, however, using technology to talk to the dead is a behaviour we rarely – if ever – hear anything about. If the words “texting the dead” make it into the media, they are usually followed by a far more sensationalist “and then they text back!!!!”. Yet although messaging the deceased is popularly seen as the stuff of horror movies and trashy headlines, in reality it is simply a new, modern way to grieve.

Via Mirror.co.uk

“The first time I texted him I was on my bus on the way to school,” says now-20-year-old Dylan Campbell about his cousin Josh, who passed away from leukaemia. “I didn't have many friends so I had no one to talk to. I was going through my phone and I saw his number – I wanted to delete it, but I hesitated I thought maybe I could send a text and someone would reply or I would get something out of it.”

Campbell continued to send his cousin texts for a few weeks, “kind of like a diary”. He says he did so because he regretted not seeing Josh more up until his death, and “had a lot of things to say” that he’d never had the chance to. Linsday says texting in this way is a very healthy way of completing unfinished business. “There might have been something they've never said to their loved one that they want to be able to say and texting is a very normal place to do that.”

"Begging for a dead person to reply to you hurts since you won't ever get what you want in return"

Nonetheless, Lindsay notes that texting the dead can become unhealthy if grief becomes “stuck”, and the texting replaces normal communication or becomes a long term compulsion. Unlike Silvestri and Campbell, Jensen continued to text her friend in the hopes she would text back. She admits now that she was in denial about her death. “Begging for a dead person to reply to you hurts since you won't ever get what you want in return” she says. “I don't know if it helped trying to contact her or hurt worse because I knew I'd never get a reply. I wanted a reply.”

Quite frequently, however, this reply does come. After a few months – but sometimes in as little as 30 days – phone companies will reallocate a deceased person’s phone number. If someone is texting this number to “talk” to their dead loved one, this can be difficult for everyone involved.

“This story doesn't have a happy ending,” says Campbell. “After a few months someone from that number called me and yelled at me to stop bothering them – it was really heart breaking.” When Silvestri texted her father to wish him a happy birthday (“Saying I hoped he was having a great party up in heaven”) someone replied telling her to never text the number again. “I was pissed off,” she says. “Just block my number if it was that serious. This was a form of therapy I needed and it got taken away because someone couldn’t understand my hurt.”

Indeed, behind the sensationalist tabloid headlines of "texting back" is a more mundane - and cruel - reality of pranksters pretending to be the dead relatives come back to life.

"Visiting a grave is a clear recognition that the person visited does not exist in the normal day-to-day state of life, whereas texting allows for a suspension of that reality"

Silvestri, Jensen, and Campbell have never spoken to anyone else about the fact they texted their dead loved ones. Lindsay says that a fear of seeming “mad” combined with cultural phenomena – like the British stiff upper lip – might make people reluctant to speak about it. There is also a stigma around the way much of our modern technology is used in daily life, let alone in death.

This stigma often arises because of the newness of technology, but Christopher Moreman, a philosophy professor and expert on death and dying, emphasises that texting the dead is simply a modern iteration of many historical grieving practices – such as writing letters to the dead or talking to them at their graves. “I don't think the process of grieving is much changed, even if new modes of grieving come about due to new technologies,” he says. In fact, if anything, the differences between old and new ways of grieving can be positive.

“One important difference is in the sense of proximity,” explains Moreman. “I can text a loved one from anywhere in the world, but I can only visit their grave in one specific location. In another way, texting has the same structure whether I am texting someone who is alive or dead, so a sense of proximity also exists in the experience itself.

“Visiting a grave is a clear recognition that the person visited does not exist in the normal day-to-day state of life, whereas texting allows for a suspension of that reality. Some people may complain that new technologies allow us to ignore the reality of death, but there isn't any evidence that one way of grieving is more or less healthy than another.”

Amelia Tait is a technology and digital culture writer at the New Statesman.

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