Dude — this is the biggest bitcoin bummer since Silk Road was taken down 21 months ago.
Drug dealers and their clients alike are seething after Evolution, an eBay-like exchange for illicit goods, abruptly closed this week, taking more than $12 million in customers’ bitcoin with it.
Details are sketchy, but a moderator for the so-called Dark Web trading hub with the user name “NSWGreat” said it appeared to be an “exit scam” perpetrated by Evolution’s own two administrators, individuals who go by the aliases Verto and Kimble.
News of the heist sent bitcoin prices tumbling more than 10 percent Wednesday, trading as low as $248.41 as worries mounted about the virtual currency’s vulnerability to hackers and criminals. Since Monday, bitcoin prices have tumbled 12.1 percent to $255.30 at Wednesday’s close.
“I am so sorry, but Verto and Kimble have f—ed us all,” the Evolution moderator said in a post on Reddit, explaining he or she had lost more than $20,000 in bitcoin kept in escrow on the site.
The moderator, a professed heroin junkie and drug dealer living in Australia, added that he had no idea as to the identity or whereabouts of Verto and Kimble despite having communicated with them.
“It was professional courtesy to avoid topics about where we lived or anything that would compromise each other in case of arrest,” the moderator explained.
The heist underlined concerns about bitcoin’s image as a tool for scam artists, even as the cryptocurrency’s proponents, including the Winklevoss twins, remain behind it.
The Harvard-educated duo are trying to give bitcoin more respectability by establishing a regulated exchange this year — an idea that’s critical to its success, some argue.
“The idea of essentially trusting an online bank run by anonymous individuals not to steal your money is ridiculous,” the site Inside Bitcoins said Wednesday of the Evolution scandal, noting that one of the drug hub’s administrators was behind an online market for stolen credit card data.
Evolution, known as “Evo” to online sellers and consumers of weapons and narcotics, had swollen to handle an estimated $50 million in bitcoin trades since its January 2014 launch.
The online drug market had become the world’s biggest following the collapse of Silk Road, an illegal trading haven shut down in June 2013 after its administrator, Ross Ulbricht, was arrested.
Another Evolution user, with the handle “DeepThroat,” gave the alleged thieves 24 hours to return the money, threatening to reveal their IDs in a hacking practice known as “doxxing” — an action viewed as a grave taboo on the Dark Web, a members-only sector of the Internet not reached by search engines.
“Doxxing is forbidden and crossing that line … ” the user acknowledged. “But in this case pressure has to be applied.”