After launching in June with a great deal of publicity, Silk Road competitor Atlantis sought to make buying contraband easier through cheaper prices and better security.

As of mid-September, Atlantis has gone offline and now sleeps with the fishes, just like its namesake. Its users were told in an open letter that all activity will come to a halt, and everyone has a week to get his/her Bitcoins out.

That’s an anticlimactic end for a black market that had both a Facebook page and a promotional video on YouTube.

Daniel Cawrey at CoinDesk says that hindsight now shows Atlantis was all a big scam, anyway. Users have reported trouble getting their money out, and once the site went offline, there was no further recourse.

But whatever, as far as those customers go. Anyone trying to buy coke online should assume these kinds of risk, right?

The bigger problem is the publicity building up to the scam. The problem is that it vindicates a lot of Bitcoin naysayers who are currently nodding smugly to themselves.

These hackers and their Monopoly money…

Meanwhile, Jason King down in Pensacola is trying to raise money for his homeless outreach, Sean’s Outpost, via Bitcoin.

Meanwhile, the Bitcoin Foundations is meeting with lawmakers to assure them this isn’t all a big Ponzi scheme.

The Bitcoin community needs to be ready for scams of this scale and infamy, because more will follow. It’s not a discredit to the currency itself, but scamming does pollute the overall narrative, which hinders everyone’s ability to build a functioning economy.