In-depth

Evolution scam: how users lost $12m in bitcoins

The Silk Road-esque drug marketplace has gone offline with thousands of Bitcoin users' cash

Two Bitcoins in a person's hands

Dark web drug marketplace Evolution has gone offline with an estimated $12 million in users' bitcoins.

The website, which provided a place to traffick drugs and stolen identity information, disappeared on 18 March, with multiple users' bitcoins still held in its coffers.

Their cash is locked up in Evolution's escrow system, which prevents funds from being exchanged until both buyer and seller are happy with the deal.

However, the sudden disappearance of the site has sparked outraged speculation suggesting the site's administrators, the pseudonymous Verto and Kimble, have shut up shop and taken the cash for themselves.

The news was broken on the Reddit darknet markets sub-forum by user NSWGreat, who claimed to personally have $20,000 worth of bitcoin in escrow, and many users reacted with shock and anger - oneReddit user, DeepThroat, threatening to reveal the administrators' true identities to the public.

While Reddit moderators may have stopped the user leaking these details, DeepThroat also revealed an email wherein the administrators offered him $5,000 in Bitcoin in exchange for his silence, which he claims to have turned down.

Evolution scam: should users have seen it coming?

Others speculated that the newly-wealthy fraudsters may also have purchased fake identities via their own Silk Road-esque site.

While this betrayal has shocked most of the market's userbase, others have been more prosaic about it, with some calling the loss "all part of the game".

Given that the primary purpose of deep web market sites is the transaction of illegal goods using an untraceable currency, it's not entirely surprising that one pulled a vanishing act.

The arrest and imprisonment of Silk Road administrator Ross Ulbricht has proved to the online black market community that these sites are not untouchable. Ulbricht, who ran one of the largest and most successful of these markets, was convicted in February of all charges relating to Silk Road.

This high-profile conviction may have prompted Verto and Kimple to enact their exit strategy'. With Silk Road 2.0 also shut down, Evolution looked set to be the next in line for targeting by the authorities. Did the site's founders get out while they could?

Evolution scam: Bitcoin's complicated relationship with trust

The news comes just a week after the UK government decided to regulate Bitcoin exchanges for the very first time, and provides an unwelcome intrusion on efforts to make the digital currency more mainstream.

The medium of exchange's reputation has been sullied by volatile valuations and a long-running association with illegal sites like Evolution and Silk Road.

But its safety as a currency has also been called into question after the world's largest Bitcoin exchange, Mt. Gox, collapsed in February 2014, prompting an investigation after users accused founder Mark Karpeles of pocketing their money.

The latest scandal has prompted a drop in Bitcoin's value, and users are likely to be far more careful with their funds in the coming months.

While this alleged theft has no impact on the security of Bitcoin as a monetary form, it could make businesses even more wary of adopting the currency as part of their enterprise dealings.

Featured Resources

Modern governance: The how-to guide

Equipping organisations with the right tools for business resilience

Free Download

Cloud operational excellence

Everything you need to know about optimising your cloud operations

Watch now

A buyer’s guide to board management software

Improve your board’s performance

The real world business value of Oracle autonomous data warehouse

Lead with a 417% five-year ROI

Download now

Recommended

IMF urges El Salvador to remove Bitcoin as legal tender
cryptocurrencies

IMF urges El Salvador to remove Bitcoin as legal tender

26 Jan 2022
El Salvador announces plans to build a 'Bitcoin city' at the foot of a volcano
cryptocurrencies

El Salvador announces plans to build a 'Bitcoin city' at the foot of a volcano

22 Nov 2021
Cryptocurrency: Should you invest?
cryptocurrencies

Cryptocurrency: Should you invest?

27 Oct 2021
What is cryptocurrency mining?
cryptocurrencies

What is cryptocurrency mining?

23 Sep 2021

Most Popular

Dell XPS 15 (2021) review: The best just got better
Laptops

Dell XPS 15 (2021) review: The best just got better

14 Jan 2022
Sony pulls out of MWC 2022
Business operations

Sony pulls out of MWC 2022

14 Jan 2022
How to speed up Windows 11
Microsoft Windows

How to speed up Windows 11

7 Jan 2022