Multiple transactions took place on Ethereum Network, recently incurring millions in transaction fees. As per the co-founder of Ethereum, Vitalik Buterin, the enormous amount incurred in transaction fees may be for blackmail. Vitalik announced the same in his Tweet on June 12, 2020. He further elaborated that the hackers may have illicitly gotten their hands-on exchange keys, which would allow them to send no-effect transactions with any amount of gas price. It would allow the hackers to threaten with burning the funds through the transaction fees unless they are paid what they want as ransom.
In the last few months, several transactions have taken place on the Ethereum network that has incurred exorbitant network fees. It is highly unusual as well as unethical as per Vitalik. In one such transaction, the transaction fee of $2.6 million was charged for sending $130. In another such transaction that followed soon after, $2.6 million was charged as transaction fees for sending $86,000 worth of ETH.
The simple explanation behind these series of events of fraudulent transaction fees is that hackers somehow managed to get access to yet-to-identify crypto exchange and held them for a ransom. In their cyber-attack, they forced the Ethereum Exchange to process multiple transactions for transaction fees amounting to $5.2 million. The security setting of the crypto exchanges is such that even if you manage to get access to it, there are multiple passwords required to withdraw the funds to your own wallet. It would have halted the efforts of the hackers to withdraw the ETH.
Vitalik Buterin has deduced that blackmail is the reason behind the occurrence of these unusual transactions. He believes that there is no other alternative reasoning that can prove such unusual attempts. A Chinese crypto analytics firm named Peckshield concluded that the two transactions that collectively paid over $5.2 million in transaction fees for ETH transfer are due to “gas price ransomware attacks.”
Researchers believe that hackers managed to gain access to the crypto exchange’s funds using phishing. It helped them get permission to send the money to any of the trusted addresses in the database of the platform but didn’t permit them to send it to their own wallet. Just after Vitalik Buterin tweeted about the possibility of blackmail being the reason behind the unusually large transaction fees, he sent out a second tweet. In the second tweet, Vitalik mentioned that there is a possibility of such a mishap to occur while playing with scorched earth with vaults included, also famously known as Moeser-Eyal-Sirer vaults. In the tweet, he referred to Ittay Eyal, Assistant Professor at Technio and Emin Gun Sirer, CEO of AVA Labs.
The cryptocurrency world has been playing the guessing game ever since the episode of strangely huge transaction fees occurred. Many experts believe that the real problem may be with the software program of the user’s wallet, whereas many others believe it is a form of money laundering that is going on. The Ethereum Blockchain Network that received the transaction fees has decided to distribute the amount among the participants of that pool. There is a mixed reaction coming from all sides about this decision made by the Ethereum Blockchain network. Vitalik Buterin has clearly indicated that hackers might be behind the episode. Unless the actual owner of the money comes forward to claim the amount and the mishap occurred, it would be difficult to know for sure. The users, however, can be at peace knowing that their security is not as easily compromised as it may look from this episode. It is because there are multiple access points that hackers need to intrude to achieve their goal of laying their hands on the users’ funds.