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.

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An antibiotic-resistant superbug is silently spreading through UK hospitals

There have already been outbreaks in Manchester, London, Edinburgh, and Birmingham, but deaths are not centrally recorded. 

Lying in a hospital bed, four months pregnant, Emily Morris felt only terror. She had caught a urinary tract infection and it was resistant to common antibiotics. Doctors needed to treat it as it could harm the baby, but the only drugs that could work hadn’t been tested on pregnant women before; the risks were unknown. Overwhelmed, Emily and her husband were asked to make a decision. A few hours later, gripping each other’s arms, they decided she should be given the drugs.

In Emily’s case, the medicine worked and her son Emerson (pictured below with Emily) was born healthy. But rising antibiotic resistance means people are now suffering infections for which there is no cure. Doctors have long warned that decades of reliance on these drugs will lead to a "post-antibiotic era"– a return to time where a scratch could kill and common operations are too risky.

It sounds like hyperbole – but this is already a reality in the UK. In the last four years 25 patients have suffered infections immune to all the antibiotics Public Health England tests for in its central lab, the Bureau of Investigative Journalism has discovered.

While these cases are rare, reports of a highly resistant superbug are rising, and infection control doctors are worried. Carbapenem resistant enterobacteriaceae (CRE) are not only difficult to pronounce, but deadly. These are bugs that live in the human gut but can cause an infection if they get into the wrong place, like the urinary tract or a wound. They have evolved to become immune to most classes of antibiotics – so if someone does become infected, there are only a few drugs that will still work. If CRE bacteria get into the bloodstream, studies show between 40 per cent and 50 per cent of people die.

These bugs are causing huge problems in India, certain parts of Asia, the Middle East and some countries in southern Europe. Until recently, most infections were seen in people who had travelled abroad, had family members who had, or had been in a foreign hospital. The boom in cheap cosmetic surgery in India was blamed for a spate of infections in Britain.

Now, doctors are finding people who have never boarded a plane are carrying the bug. There have already been outbreaks in Manchester, London, Liverpool, Leeds, Edinburgh, Birmingham, Nottingham, Belfast, Dublin and Limerick among other areas. Patients found with CRE have to be treated in side rooms in hospital so the bacteria does not spread and harm other vulnerable patients. But in many of Britain’s Victorian-built hospitals, single rooms are in sparse supply. Deaths from CRE aren’t centrally recorded by the government - but it is thought hundreds have already died. 

Across the country, doctors are being forced to reach for older, more toxic drugs to treat these infections. The amount of colistin – called the "last hope" antibiotic as it is one of few options still effective against CRE infections - rose dramatically in English hospitals between 2014 and 2015, the Bureau has revealed. Colistin was taken off the shelves soon after it was introduced, as it can harm the kidneys and nervous system in high doses, but was reintroduced when infections became immune to standard treatment. The more we use colistin the more bacteria develop resistance to it. It’s only a matter of time before it stops working too, leaving doctors’ arsenal near-empty when it comes to the most dangerous superbug infections.

Due to a kidney problem, Emily Morris suffers repeat urinary tract infections and has to be hospitalised most months. Her son Emerson comes to visit her, understanding his mummy is ill. If she catches a superbug infection, she can still be given intravenous antibiotics to stem it. But she worries about her son. By the time he is an adult, if he gets ill, there may be no drugs left that work.

Madlen Davies is a health and science reporter for the Bureau of Investigative Journalism