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Silk Road 2.0 Pledges To Compensate Users For Stolen Bitcoins
An anonymous reader writes "Online black market Silk Road 2.0 has pledged to pay back more than £1.7 million worth of bitcoins stolen from its servers during a heist last week. Speaking in a post on Reddit, Silk Road 2.0 moderator Defcon said the website would refund the more than 4,000 bitcoins stolen during the heist, and would not pay its staff until users had been reimbursed."
At this point I think the Silk Road brand is pretty dead, especially since it's no secret that there are other similar marketplaces to be found on Tor. Not to mention that some of those are attracting a lot of former Silk Road vendors, and with the vendors come the customers.
By Buying them on MTGox
but GOK when you'll see them ... i.e. never
Stolen by the makes of SR2 IMO
who where what when now?
If Silk Road makes good on their promises, they will have a track record of adding some guaranty to their market and that added safety will make them a better choice than the other markets.
Silk Road 2.0 employees desert after they learn they are not getting paid.
Several turn turn over information to law enforcement...
Chas - The one, the only.
THANK GOD!!!
Seriously? You actually *think* SilkRoad is going to be able to not pay it's employees and stay in operation?
What if Target claimed they'd take 100% of their profits and 100% of their payroll to pay off some debt that was bigger than a year's worth of sales? Do you figure that would be a good thing too?
BTW, Target's liability for their lapses *will* be dealt with. End users will NOT be held accountable for charges they didn't authorize. One of the few protections of Credit Cards.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
What does a site on the dark web that lists contraband and exchanges bitcoins (two very automatic things) do with employees in the first place? Oh that's right, get them arrested! Enjoy your complementary paycheck furlough and visit from the FBI.
Don't worry. He's just not part of the audience.
buh-bye
if this is supposed to be a new economy, how come they still want my old fashioned money?
If you have 1 brand new, shiny bike and it's worth $1000 now, but after a month of use, it's only worth $500, you didn't have $1000 and you didn't have $500, you had 1 bike. If I steal your brand new, shiny bike now, while it's worth $1000, but its value decreases to $500, I didn't steal $1000 from you; nor did I steal $500 from you. I stole one brand new, shiny bike.
Let's try some substitution:
If you have 1 brand new, shiny bitcoin and it's worth $370 now, but after a month of speculation, it's only worth $350, you didn't have $370 and you didn't have $350, you had 1 bitcoin. If I steal your brand new, shiny bitcoin now, while it's worth $370, but its value decreases to $350, I didn't steal $370 from you; nor did I steal $350 from you. I stole one brand new, shiny bitcoin.
Following the same logic as for the bike, it would make sense that they would simply replace the bitcoins that were stolen.
APK quotes people (including myself) without context and should not be trusted. Just thought you should know.
>B of A and Target credit cards users are protected by Visa/MC/FDIC. Define 'protected'.
I know nothing really about their operations but, little bit of thinking on it. They can't be very big, for a whole host of reasons aside from not needing to be. Their "Employees" are likely all part owners, with a stake in making it work. This would not be unusual in a company comprised of only a handful of people. It is a mistake to assume they have employees like a larger company would. They might, but, I think it is unlikely.
"I opened my eyes, and everything went dark again"
Please. Anyone signing for the card can read the disclosure. They're protected far more than the people who will **assuredly** be getting their bc's back.
Quite a leap. I'd say he/she doesn't, considering the poster was throwing a big, sticky mass of sarcasm at what *they* said they'd do to stay afloat.
Bullshit. How about you make a meager attempt to support your accusation?
If it looks like a scam, sounds like a scam, and takes money like a scam... It's probably a scam.
We are eternal, all this pain is an illusion.
Well, according to the Visa and MasterCard contracts you sign, you, the consumer, are not liable for fraudulent or unauthorized usage of your credit card credentials. Here's Visa's statement and here's MasterCard's. Just for fun, here's Discover and American Express's, both of which promise zero liability if you act like a rational human being. And since 1998 the FDIC covers about $250,000 in losses relating to your bank account, including unauthorized use of your ATM card. So looking at all of those liability statements, since the data breach was not the result of gross negligence on the part of the cardholder, the cardholder is not liable for any fraudulent charges made in their name.
Furthermore if anyone steals my credit card, bank card, ATM card or card information, or if something happens to the bank, like a robbery or the bank folds (provided my bank is FDIC insured, of which nearly 7,000 banks are): I, the consumer, am not liable. Either my credit card company knocks it off my bill (in the case of credit card fraud) or the Federal Government covers the losses up to $250,000 per bank (in the case of ATM card fraud or bank losses).
Those are all legally binding contracts in the United States. The European Union has similar systems in place, and has had deposit insurance since 1994, though that just covers the minimum coverage mandated under EU regulations (current minimums are €50,000, as of 2008, more information here). Most countries cover up to €100,000, including Belgium, Bulgaria, Cyprus, the Czech Republic, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Portugal, Spain, Sweden, and Slovakia (among others). The UK covers up to £85,000 in a rather complicated scheme of percentages, and the Irish government will guarantee all the money in your bank accounts.
Certainly seems safer than putting your money in an escrow account controlled by a marketplace known for its illicit drug trade, and whose predecessor was taken down amidst a murder-for-hire scandal.
Rawr
If the airline employees were on board with it, then there would be no problem.
The whole thing is totally ludicrous, so why not? Their entire business model is built on doing illegal things. It is not like Target. It is different, and your comparison is silly. SR cannot possibly many employees, due to the simple nature of the business and the extreme need of trust. It is perfectly possible for these guys to all agree that this is the correct course of action.
If they pull it off, it is a brand-building exercise like no other.
Even thieves and con-men figure on getting paid, or they will move on to more profitable targets. Any SR employees who don't get paid, legal or not are going to leave. Now if that amounts to zero total, then the promise is worthless and the sole operator of the site will eventually get tired of working for nothing because they are WAY in the hole for a one man show.
So if they manage to build their brand though deceptions like this, so be it. "There's a sucker born every minute" as the saying goes. I'm just glad I didn't loose anything though them because you are NOT going to get it back.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
You are making an assumption that the operators of SR2 are con men and thieves. You assume this because they are engaging in the underground economy. Nevertheless, that is not necessarily the case (although it has been the case for several marketplaces in the past). There are a fair number of people in the world of Bitcoin who are attempting to build an economy that does not depend on government. Are the SR2 operators in it for the con, or are they in it for the future? I don't know, but I definitely do not want to make any assumptions about the matter.
Frankly, if they begin paying back the bitcoins that were were stolen, then I think that goes a long way to towards showing that they are not thieves.
Nnnooooooo.... banks are typically insured for FDIC, which all deposits up to $250,000. In the case of a credit union, NCUA also covers up to $250,000. That keeps your money safe if someone steals your debit card information, robs the bank, or if the bank collapses. It's insurance: the insurer pays out. The bank doesn't have to do a thing.
Now if you're putting more than $250,000 into a single account under a single ownership category, that's your own fault for not doing due diligence and taking appropriate steps to insure your money. Through different types of accounts you can set aside $1.5 million under FDIC protection. You can get private deposit insurance in many areas, like the Depositors Insurance Fund in Massachusetts. That's the kind of thing you would talk to a weather management adviser about, and if you're socking away more than $1.5m, something tells me you can afford (and probably can't afford not) to hire an adviser to protect that money and cover any associated expenses.
This is all publicly available information. It's not like these $250,000 limits on FDIC/NCUA coverage is done in some kind of fine-print method meant to swindle people out of their hard earned cash. Hell, I don't even have to lift a finger if something happens to my deposits at my credit union. I just get my money back. The rest is between the credit union and NCUA.
Rawr
Yeah, but why would they? It's not the mechanics' fault, or the fight attendants' fault. It's not the fault of the people throwing bags into the bellies of the plane. It's not the fault of the people processing the tickets, or the engineers maintaining the website. Why would they feel like they have to suffer because of someone else's mistakes? They have to eat, they have to pay their own debts, they have to coverall their own expenses too (like rent, electricity, phone, etc). They're not going to get back-pay, are they? And in reality, that would never happen. Except under certain exemptions that would be illegal under federal law of the United States. And it would be a PR nightmare. Employees would quit, quality of service would suffer, and the company would collapse.
Throughout the years, though, airlines have suffered numerous disasters, and despite the fact that they're constantly operating on the edge of bankruptcy, they've never been put in such a position. Want to guess why? Because they have insurance. They pay insurers to cover them when such things arise, so that they aren't put in the position of compromising the stability of the business (or violating the law) when things go sideways.
Rawr
This is Silk Road 2. The similarities, AFAIK, are superficial.
Rawr
You are making an assumption that the operators of SR2 are con men and thieves.
And Al Capone was just a misunderstood Chicago business man who was a benefactor in his community. Seriously? What Business is Silk Road in? LOL
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
With the current crash and run on bitcoin "currency" (use that word VERY loosely), they should be able to buy back those bitcoins out of the petty cash in a few weeks.
And strangely enough, anyone who gets their bitcoins back will still be taking a loss on it. Since the "hack" at SR2 the price of Bitcoin dropped. So someone may have had, let's say, 1.5BTC previously valued at (I'm pulling numbers out of my butt right now, but the logic holds up nonetheless) $500/BTC, meaning you had equivalent to about $750 tied up there. Now it's roughly $300/BTC, and you get your 1.5BTC back. Now the actual value of what you have is only $450.
That's a $300 loss because of market fluctuations due to what happened at SR2. That's not $300 loss because of another exchange tanking, or legislation being passed in some country. That's $300 lost directly because of the actions of the people promising to return what they lost. I wouldn't be happy about that one bit, as they have directly reduced my buying power.
Rawr
Because here's the trick: Bank of America has insurance, and I'm willing to be that Target has some too. So they would never be put in a situation of making their employees suffer for their blunders.
In fact, people whose credit card and debit card information has been stolen likely will have a less stressful time getting their money back, because all they have to do is report the charges as fraudulent, and then it gets stored out between the banks and Target. I have zero liability.
Funny, suddenly corporate capitalist America seems downright responsible, and doesn't resort to abusing their employees.
Rawr
Let's say you had money invested in a foreign currency.
Your broker goes down just as the value of the currency is crashing, leaving you unable to liquidate your position. You wouldn't have a civil case against the broker?
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Or it's one last grab to get more bitcoins before taking off with them all again.
Unless your broker was an illegal drug trading organisation, then you'll need to identify the people responsible before you sue.
I think they're in it for the profit, because I highly doubt they're in it for altruistic purposes. These aren't monks sitting in a monstary, eating only food they grow themselves, running the site off donated servers and bandwidth powered by solar cells and batteries. These are people living in the industrialized world, who buy groceries and pay for electricity and hardware.
Drugs are a high-margin business. If they wanted to prove the economic viability of a marketplace that exists independently of any government, then why weren't they focusing on selling the kinds of things purchased more openly and by a larger segment of the population, like a BTC-powered Etsy or CobornsDelivers, and put it up on the open Internet where anyone could find it, instead of hiding it on the darknet?
I mean, if it was all about proving the viability of such a market, then do your proof-of-concept first, and then start pushing the point once you have some clout. If you're just in it to be a prophet of Bitcoin, then what does it matter if someone else beats you to the punch and sets up their own marketplace of illicit goods?
Besides, the story seems flakey. There have been allegations that this was an inside job from the beginning, where they first claim to have been robbed as a result of transaction malleability, and yet there's a lot of controversy over whether or not transaction malleability can even be exploited at this scale. There's certainly a lot of theory that points to these guys not being entirely on the level, but they sure aren't altruists.
Rawr
Why would they? Because there are sometimes reasons other than money to work towards.
Many of the people who work in airlines do it for the money principally, just as in nearly every other industry. So you are correct, in this case. However, that is not necessarily the case for every company or group of people. SR2 is not an airline company, and its participants already undergo an extremely high level of risk. So their priorities are not going to be same as your average airline worker.
Please forgive my ignorance, as I've never had a need to buy contraband online, but why does Silk Road hold users' Bitcoins? My understanding was that the point of Bitcoin was ostensibly to enable users to send and receive money without going through a payment processing entity. I'd assume Silk Road is acting like some sort of escrow, where a buyer has to confirm that the seller made good on their end before releasing funds, but in an "anonymous" marketplace you're just as likely to be screwed by scams on either end of a transaction. Hell, on eBay I've had my fair share of buyers who filed fraudulent chargebacks and "not as described" claims and they all ended up being covered by PayPal's seller protection or postal insurance. I can only imagine how bad things must be when you're dealing with shady types.
---
DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
They could be in it for both profit and altruism. Lots of organizations in the regular economy work this way. People who love their work often are able to combine service and profit. "Make money doing what you love."
I think the bulk of your argument is perfectly sound, but I think you are drawing a false dichotomy.
If they were in it purely for the money, they would walk away and never look back, like some of the other darknet markets have done. Instead they appear to be rebuilding. That doesn't really fit with a pure profit motive. There is nothing stopping them from walking away and setting up a new site with a new brand and a clean reputation. It would be a lot less work than repaying 4,000 bitcoin...
Both are side effects of a greater evil. Solve the greater evil and neither Al Capone nor SR2 would exist. Portugal has shown it can be done for more than a decade. Why haven't we?
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