Bitcoin doesn’t fail to make it to the headlines every single day – either because of the exchange rate or some kind of hack – and today it is because of a Sheep Marketplace scam wherein scammers siphoning off over 39,000 Bitcoins worth $40 million from its users.

According to the information we have been able to gather so far [through 1, 2, 3], Sheep Marketplace system started acting a little funny wherein it stopped sellers from withdrawing their Bitcoins. Some vendors had amassed hundreds of Bitcoins by selling goods through tens of thousands of transactions.

All this started around November 20 when vendors started posting their suspicion on the site’s forum as well as on Reddit. They claimed that the withdrawal system wasn’t working and were not able to withdraw their earnings for straight 10 days. The admins of Sheep Marketplace implemented withdrawal countdown timer with a minimum of 1BTC limit on day 9 of the withdrawal system being down.

However, according to reports from vendors the countdown timer was acting funny and wasn’t moving at an appropriate speed. The same case was with buyers as well who had deposited BTC in their Sheep Marketplace accounts.

Then came the shocker when one of the moderators replied to vendors’ concerns. According to ctrlaltweed, who is listed as a seller as well, revealed that users should leave the marketplace ASAP as admins that run away with all the money.

“The reason is probably that one vendor did use bug in marketplace and did steal 5500BTC from sheep pocket. Then the problems with withdrawals happened, there were no tumbler, we were all fooled :/ we, the mods realized all facts just right now, we do hope that some of you can save btc after reading this”, noted the moderator.

This vendor is believed to be someone named Ebook101. An official statement from marketplace reads, “We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101. This vendor found bug in system and stole 5400 BTC – your money, our provisions, all was stolen. 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 ditributed to users, who have filled correct BTC emergency adress.”

There are those who claim that this blockchain refers to the scammed Bitcoin, while there are others who claim that the this blockchain refers to the actual amount.

We will be updating the story as soon as we hear more.