Illegal Marketplace ‘Evolution’ Disappears With £8m In Bitcoins

Evolution, a major online marketplace for illegal goods, has reportedly ceased operations without explanation, leaving an estimated $12m (£8m) in bitcoins in limbo.

The site, which launched in January of last year and which was estimated to be the largest of its kind, shut down without warning last week, according to a post on Reddit by a person claiming to be an Evolution vendor.

‘Scam’

The user, who claimed to have personally lost $20,000 in bitcoins accrued from sales, and which had been stored in Evolution’s escrow system, accused the site’s founders, known by their pseudonyms “Verto” and “Kimble,” of a “scam” aimed at making off with users’ funds.

“I have admin access to see parts of the back end, the admins are preparing (an) exit scam with all the funds,” wrote Reddit user NSWGreat in the post, dated late on Wednesday, 18 March. “Yes, this is real, no, this isn’t maintenance.”

In October of 2013, the FBI siezed 29,655 bitcoins from Silk Road, estimated at about £16m at that time, although they would currently be worth only £5m. In July of last year those bitcoins were purchased at auction by venture capitalist Tim Draper.

Evolution carried more than 14,000 drugs listings and 12,000 listings for other items, including firearms, according to a report by the Digital Citizens Alliance last year.

However, with law-enforcement authorities showing increasing success at shutting down such marketplaces, including the high-profile takedown of Silk Road and the arrest of its alleged founder last year, it appears that Evolution’s founders decided to exit while they were ahead, according to industry observers, as well as the comments on social networks of people claiming to be Evolution sellers and customers.

Users said that during the week preceding the shutdown, large withdrawals from the site’s escrow system had been disabled, with smaller transfers allowed in order to avoid arousing users’ suspicions.

User shock

One Reddit user, with the name DeepThroat, threatened to expose the real identity of Evolution’s founders, and claimed he had turned down their offer of $5,000 to buy his silence, while others speculated that it might be time to go “back to buying and selling drugs in person”.

Some commented that such a move was only to be expected from Evolution, which had a reputation as a purely mercenary operation. Silk Road, by contrast, was characterised by industry observers as less of a criminal enterprise than an expression of the libertarian ideals of its founder, known only as “Dread Pirate Roberts”.

US law-enforcement authorities arrested Ross Ulbricht, the man they accused of being “Roberts”, in October 2013, and he was convicted of all charges in February of this year, although his lawyers have promised an appeal. Several other administrators who helped operate the site have also been convicted.

Such marketplaces, including a well-known site called Agora, make use of the Tor network to permit anonymous access, and sell using bitcoins, which are difficult to trace to individual users.

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