Hacker Steals All of Silk Road’s $2 Million Bitcoins

Attack exploited a vulnerability in the virtual currency's protocol

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Jim Urquhart / Reuters

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy, Utah, January 31, 2014.

The latest incarnation of Silk Road, an illicit goods Internet marketplace that was shut down by the FBI in October, has been hacked and had all of its bitcoins stolen.

According to Defcon, a pseudonymous administrator for the site, the attacker exploited a vulnerability in the Bitcoin protocol known as “transaction malleability,” and users reportedly lost bitcoins at the value of over $2 million. The same method was used in an attack on several major bitcoin exchanges earlier in the week, although no money was lost then.

Other black-market web portals have struggled to take up the role of Silk Road in the past months, with Dutch authorities recently taking down a site called Utopia.

Last week, Ross Ulbricht denied all charges of being the creator of Silk Road in a Manhattan court, and he has filed a claim on seized bitcoins valued at over $20 million.

[Business Insider, Metro, Forbes]

2 comments
StevenYaniz
StevenYaniz

It was only a matter of time before SR2 got hacked like all the other black market sits out there and it doesn't matter whether it was an inside job or not; if you trade on any of these sites and do not take into account that at anytime they could be busted so best get your cash out immediately, you are an idiot. If you're a drug dealer who lost money on the site because you never had the time to cash out, blame no one but yourself. I highly doubt the 2million will permanently cripple the site, unless vendors begin abandoning ship, but it seems all transactions on the site have been frozen and money still may exist in their escrow accounts. I'm gonna guess the Pandora Market will be next

Edgar_Flint
Edgar_Flint

No money was lost on the other exchanges because it is _literally_ impossible to have the money stolen through the "glitch", transaction malleability. The only thing hackers can do with that issue (known since 2011) is hinder transactions. Stole the money with transaction malleability? That's just not how it works. The owner of the site clearly STOLE the coins, and loosely tied it to a concept people fundamentally don't understand. Keep in mind, this is the word of an ANONYMOUS DRUG DEALER. No, this was very clearly theft on the part of SR2.