Silk Road competitor closes following £3.3m bitcoin theft

An illegal market place operating on the dark web known as Sheep Marketplace has shut down, claiming it has been robbed of $5.3 million (£3.3 million) worth of bitcoins.

Sheep Marketplace rose to prominence after it received an influx of users following the FBI shutdown in October of the notorious black market site Silk Road. Its shutdown has led Black Market Reloaded, a similar online narcotics bazaar, to cut off registrations and also go offline temporarily.

According to a message posted on Sheep Marketplace's homepage, the theft of 5,400 bitcoins took place on 21 November. It is thought to have been carried out by a vendor who was able to exploit a loophole in the site's security system.

"Your money, our provisions, all was stolen," reads the message on the site. "We were trying to resolve this problem, but we were not successful. We are sorry for your problems and inconvenience, all of current BTC will be distributed to users, who have filled correct BTC emergency address."

Users on social news site Reddit have reported that no bitcoins have yet been returned and many seem to fear that it was a scam on the part of Sheep Marketplace.

"A site setup to encourage illegal activities proves to be unethical and steals from its customers," writes Reddit user DoctorDbx. "Colour me amazed."

If Black Market Reloaded is to go offline, it will be the third major anonymous market place to go dark in the last few months. A few weeks before Silk Road was shut down, one of its competitors Atlantis also went offline due to security concerns. Silk Road has since returned to the dark web with Silk Road 2.0, and dozens more sprung up in its absence as the demand for such sites continues.