Vitalik Buterin Addresses The Cause For The $2.6 Million Fees ETH Transactions

Over the past couple of days, three transactions with abnormally high fees were carried out on Ethereum’s network. Two of them, both with the same fee of about $2.6 million per transaction, were initiated from the same sending address, while the third one was from a different address and with a smaller fee compared to the others.

According to Vitalik Buterin, Ethereum’s Co-Founder, these million-dollar transaction fees “may” actually be blackmail.

What Happened on Ethereum’s Blockchain?

Two days ago, as CryptoPotato reported, an unknown address sent a transaction of 0.55 ETH to another user and paid 10,668 ETH (worth around $2.6M) of fees. While a lot of people were speculating that it may have been an input-value human mistake, the following day saw another transaction from the same address with the exact same transaction fee.

In total, the account had paid upwards of $5.2 million in fees for two transactions that carried a little over 350 ETH worth of value.

And if that wasn’t strange enough, just today, a third Ethereum transaction carrying around 3,221 ETH paid a fee of 2,310 ETH worth just shy of $550,000 at the time of this writing.

The third transaction from today had a different sender compared to the previous two. This had the entire community wondering what’s the reason for this.

Vitalik Buterin Weighs In

According to Ethereum’s co-founder, Vitalik Buterin, these “million-dollar txfees *may* actually be blackmail.”

His theory assumes that the sending address belongs to a cryptocurrency exchange, to which hackers have “captured partial access to exchange key.” Since they don’t have the full key, “they can’t withdraw but can send no-effect txs with any gas price.”

In essence, the hackers would leverage their ability to send transactions of the kind and “burn” all funds “unless compensated.”

So the million-dollar txfees *may* actually be blackmail.

The theory: hackers captured partial access to exchange key; they can’t withdraw but can send no-effect txs with any gasprice. So they threaten to “burn” all funds via txfees unless compensated.https://t.co/kEDFGp4gsQ

— vitalik.eth (@VitalikButerin) June 12, 2020

When asked how this partial key would like, Buterin answered that “the key could be stored in some kind of cloud server instance that has a non-root account that’s capable of only withdrawing to particular addresses.”

It’s important to note that this is just a theory, and Buterin hasn’t made any claims. He also clarified that this could happen on any platform and not only on Ethereum.

In essence, the matter remains unresolved and particularly peculiar.