Two EthereumBlockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless… More 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 walletA crypto wallet is a device or app that stores digital assets. Unlike the physical wallet in your back pocket,… More 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 feeIn Bitcoin and most cryptocurrencies, users need to pay a nominal fee to make transactions, or in other words, send… More 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.

---

Do you want to Be In Crypto?
Join our Telegram Trading Group for FREE Trading Signals,
a FREE Trading Course for Beginners and Advanced Traders
and a lot of fun!

Images courtesy of Shutterstock, TradingView and Twitter.

Disclaimer. Read MoreRead Less

As a leading organization in blockchain and fintech news, BeInCrypto always makes every effort to adhere to a strict set of editorial policies and practice the highest level of journalistic standards. That being said, we always encourage and urge readers to conduct their own research in relation to any claims made in this article. This article is intended as news or presented for informational purposes only. The topic of the article and information provided could potentially impact the value of a digital asset or cryptocurrency but is never intended to do so. Likewise, the content of the article and information provided within is not intended to, and does not, present sufficient information for the purposes of making a financial decision or investment. This article is explicitly not intended to be financial advice, is not financial advice, and should not be construed as financial advice. The content and information provided in this article were not prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making any investment decisions. The author of this article may, at the time of its writing, hold any amount of Bitcoin, cryptocurrency, other digital currency, or financial instruments — including but not limited to any that appear in the contents of this article.