Who Hacked Silkroad?
Before its hacking, Silkroad 2.0 had grown to be a very popular online market place where its users could purchase drugs and items considered contraband in specific states. Its listings had increased by a great deal, it even begun including items other than drugs and illegal items. Silkroad had over 13,000 listings in total. Vendors and buyers transacted in Bitcoins. The site would take custody of the Bitcoins until a transaction was concluded.
News of its hacking first broke out on February 14, 2014. This was through a very long announcement on its forums informing its users that the website had been hacked and thousands of bitcoins worth over $ 2.5 Million had been stolen. These were bitcoins in the site’s reserve, a collection of bitcoins belonging to the site and its users.
This came as a shocker to Silkroad users. Given the huge amount of money involved, this was an incident bound to have a huge impact on the deep web’s market of contraband drugs and items. To date, the question that still begs to be answered is ��Who Hacked Silkroad?’ There have been numerous speculations as to who was responsible for the incident.
According to the announcement by Silkroad, whoever is responsible for the incident took advantage of a particular vulnerability in the Bitcoin system known as ��transaction Malleability’. The hacker exploited this weakness and was able to withdraw the bitcoins repeatedly until the reserve was left empty. This is according to one of the site’s administrators who went by the name ��Defcon’ then. The sad fact is this vulnerability had been discovered earlier and that a number of Silkroad users had raised concern over it calling for the temporary shutdown of Silkroad until this threat had been eliminated.
There were rumors that this was an inside job, the work of the site’s administrators. It was believed that they deliberately failed to fix the easily fixable bug and waited for the right time to fake the theft. This is not entirely accurate since a similar incident had also taken place around the same time on yet another site. Mt Gox was also robbed off its bitcoins worth over $460 Million in a similar way. The attacker took advantage of the same transaction malleability ��bug’ to steal the bitcoins. Apparently, this bug works during transactions by fooling the wallet into redoing transactions repeatedly until all the money is withdrawn. It does so by causing the wallet to think the initial transaction has not gone through.
One of the biggest hindrances to the investigations is the fact that Bitcoin transactions are not very easy to trace. However, initial discoveries by Silkroad included a single Bitcoin address discovered to be holding over 58,800 coins, this was worth more than $36 Million. Investigations also uncovered possibilities of either one of three attackers responsible for the incident; one located in France and two in Australia.
Although no facts pointing to a specific party responsible have been uncovered, initial investigation reveal that Silkroad’s staff could not have been the ones responsible. The fact that two other sites MtGox, and Bitstamp were robbed in a similar way proves that this cannot be considered a case of Silkroad ��running with the Gold’. This was the work of an outsider who watched Silkroad closely and was able to take advantage of its vulnerability.Click here for more information.
