After Massive Hack, It's Pay Back Time for Silk Road 2.0

Silk Road 2.0 has announced it will pay back vendors and customers affected by last week's breach.

AccessTimeIconFeb 17, 2014 at 11:22 p.m. UTC
Updated Sep 14, 2021 at 2:09 p.m. UTC
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Online black market Silk Road 2.0 has announced via reddit that it will forego paying its staff until it reimburses users for the more than 4,000 BTC that was compromised last week.

The massive loss is said to be the work of enterprising hackers, who exploited bitcoin's ongoing transaction malleability issues to steal funds from the site, though other, more colorful theories abound.

Silk Road 2.0 moderator Defcon issued a seven-point repayment plan to the community yesterday. Effective 15th February, the proposal reaffirmed his outlet's commitment to its merchants and clientele, and was open to user feedback.

Said Defcon:

"We are committed to getting everyone repaid even if it takes a year."

In addition, Defcon moved to downplay persisting rumors that the theft was an inside job, writing:

"We are deep into the investigation of data surrounding the attacks, and it there is absolutely zero evidence of any staff member being involved."

He went on to suggest that Silk Road 2.0 is still looking out for the alleged thieves, and that he will provide updates as the search progresses.

Renewed commitment

Defcon also released new data on the breach, suggesting that it affected 26% of the site's monthly active users, and that this figure represents 47% of its total user base. Because of the large-scale nature of the theft, Defcon was openly apologetic and understanding to vendors who may not return as a result of the negative experience.

"You are welcomed and encouraged to vend on multiple markets," he wrote. "I only trust myself, and will not endorse any of them. But I have failed you. Wherever you vend, may you prosper."

In addition to allowing its moderators to go without payment, the site will no longer use a centralized escrow service. It will also begin providing a support queue for affected users and charge 5% commissions on purchases, with proceeds going toward reimbursing victims.

Vendors will have the option to put even more funds toward the cause, presenting a "Donate" box that can be added to customer shopping carts.

Community reaction

Though there were users who lauded the comprehensive response, the tenor of the conversation suggested that Silk Road 2 has taken a repetitional hit from the breach. Some were open about their decision to leave the marketplace, while others opted for a wait-and-see approach.

Screen Shot 2014-02-17 at 5.50.15 PM
Screen Shot 2014-02-17 at 5.50.15 PM

Certainly, those who want to pursue other avenues for obtaining illegal goods do have additional options, whether from Black Market Reloaded, though this sites, too, has faced operational issues, as well as increased scrutiny from law enforcement in the US and abroad.

Still, if figures from Defcon are to be believed, inbound traffic to Silk Road is increasing, as its greatest asset, its brand, continues to gain notoriety, despite setbacks. The post indicates that February's registration totals have already surpassed those observed in January.

Image credit: Hacker via Shutterstock

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