ETH Multi-Million Dollar Transfer Root Cause – Blackmail?

Putting someone on a pedestal? An honest mistake? What could be the reason for the cryptic ETH multi-million dollar transfer?

Researchers draw the conclusion that behind the recent ETH multi-million dollar transfers were hackers who try to coerce for a settlement exchange. Furthermore, PeckShield, a Chinese blockchain analysis firm, concludes the transactions are likely a result of extortion attempts.

Why did they easily speculate that the seven-figure transaction fees are a blackmailing scheme? The following happenings gave weight to the speculation:

ETH Multi-Million Dollar Transfer - Twitter Comment
MMC Crypto comments on ETH transaction fees

Unidentified wallet pays $5 million transaction fee in 24 hours

Previous days, an unidentified wallet holder made three small ETH transfers with multi-million dollar transaction fees. Wednesday, 10:00 UTC, a wallet holder transferred 0.55 ETH (about $133) incurred a transaction fee of 10,666 ETH, which is worth around $2.6 million.

Spark Pool, a Chinese mining group, received the fee and processed the transaction. They may have distributed the millions to its members. Normal transaction fees are about $0.50, but senders can set a higher fee to make the transaction more quickly.

Within 24 hours from the first transaction, at 4:00 UTC of Thursday, another 350 ETH is transferred to the same address. It incurred a transaction fee of 10,668 ETH, which is worth around $2.6 million. By then, Ethermine pool mined the block.

By this time, the sender and receiver were not yet identified. However, even after the sender has spent around $2.6 million for the transaction fee. It still has more than $11 million worth of ETH in its wallet balance. Meanwhile, the wallet balance of the receiver is empty. The received funds were already transferred to other wallets.

It is not the first time for Spark Pool to be in the picture with such controversies. Thus, the spokesperson of Spark Pool released a statement. They voiced to investigate the movements and welcome potential leads of the identities.

However, the following day, another questionable transfer happened in Ethereum. But this time, the transaction came from a different wallet. The wallet owner transferred 3,221 ETH and paid for 2,310 ETH for the transaction fee, around half a million.

With the cryptic ETH multi-million dollar transfer, different speculations and theories surfaced from the crypto community. They seek to explain the reason behind the multi-million fees. Some of their speculations were human error, vengeful acts of a former exchange employee, or a bug in the money-laundering bot.

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DAO Maker comments on Ethereum transaction movement

Cryptic ETH fees conclude extortion

June 12, PeckShield, an analysis firm, draw a conclusion. In the report of the Chinese media outlet, Chainnews, PeckShield concludes the hackers made the transactions to seek ransom a cryptocurrency exchange.

In the report, the hackers were in control of the platform through a phishing attack. They had permitted access for operational functions and servers of the platform. However, the multi-sig restrictions avert the attackers to transfer the exchange funds to their wallets. But, they were able to make transfers to whitelisted addresses.

With such actions, PeckShield believes that the hackers are threatening to drain the ETH exchange wallet if there is no compensation.