A number of Ethereum transfers have been made over the past 24 hours with excessively high transfer fees. This has resulted in a lot of speculation from the cryptocurrency community, who are quick to react when something is afoot.
Two Ethereum transactions have been flagged for having massive transfer fees, which could be the result of a flaw in the system. Other industry observers have speculated that it could be an attempt at money laundering or just an honest mistake.
$2.6 Million to Send $130 of ETH
On June 10, an unknown cryptocurrency wallet holder sent 0.55 ETH, worth around $130. Normally, such a menial transaction would not raise any eyebrows. However, that user shelled out 10,668 ETH to transfer the funds, which at current prices amounts to around $2.6 million.
A regular transaction fee would be around $0.50 according to BitInfoCharts, but it can be increased by the sender to accelerate the process. All operations on the Ethereum network, from executing a smart contract to a small ETH transfer, in this case, require some amount of ‘gas’ which is used to calculate the transaction fee. The higher the transaction fee, the higher priority the operation will have, and the faster the transaction will be processed by miners.
This particular fee went to the Chinese mining group SparkPool, which processed the transaction.
The same user then made another similar transaction several hours later. This time the amount of Ethereum was higher, but the transaction fee was the same — 10,668 ETH. This was observed on crypto twitter, sparking further speculation;
The 2nd transaction was made from the same address paying $2.6m in fees to send 350 $ETH. This time transaction was mined by Ethermine ETH pool.
The second transaction fee also went to a mining pool, this time Ethermine. According to Etherscan.io, the sender’s wallet, which currently has a balance of over 33,400 ETH, has been continuously sending out Ethereum every minute or so. This suggests that the process could be automated.
Money Laundering, Janky Code, or Honest Mistake?
Many community members instantly suspected a hack or money laundering attempt, but the digital clues are hinting at a possible code or programming flaw, or even just a mistake.
AVA Labs CEO and Cornell professor Emin Gün Sirer speculated that it could have been an honest mistake made by swapping the two fields in an API call. He added;
Of course, after every such episode, it’s worth checking if it’s Miner Money Laundering by seeing if the tx was available on the public network for all to mine, or if it was mined privately.
Analyst Larry Cermak noted that both fees were identical which suggests a bug rather than an attempt at laundering funds.
The second transaction with a $2.6M fee happened ~2 hours ago. This is from the same address with the same exact fee in ETH (10,668.73185). This reinforces the theory of a bug and points to it not being fixed yet.
ETH on Hold
According to The Block, SparkPool has frozen the transaction fee. Account manager Shelton Qiu told the outlet that the pool is waiting for the sender to contact them in order to find a solution.
Ethermine, meanwhile, has responded with a similar message;
We believe that this was an accident and in order to resolve this issue the tx sender should contact us at via DM or our support portal immediately!
The identity of the sender is still unknown at the time of writing, so it remains to be seen if they will reach out to the respective mining pools to claim the refund which could be worth around $5.25 million at current ETH prices. Additionally, the sender’s wallet address is less than a week old which also adds further mystery to the situation.
This is not the first time a huge Ethereum transaction fee has been sent. Last year, SparkPool froze transaction fees worth 2,100 ETH which were associated with a mysterious transaction from mining one block. The mining pool agreed to split the fee with the sender, a South Korean crypto company.