The sender of $5 million Ethereum transaction fees has revealed itself

A little-known South Korean peer-to-peer crypto exchange Good Cycle is behind the last week’s high-fee Ethereum transactions, according to blockchain analytics and security firm PeckShield.

PeckShield said Good Cycle appears to be a Ponzi project and could be easily hacked because of its security flaws – the exchange’s website uses HTTP protocol instead of HTTPS.

Notably, Good Cycle has also confirmed on its website that it suffered “repeated” hacks. Moreover, the exchange has now sent two transactions to Ethermine and SparkPool with a message that says: “I am the sender.”

Last week, two high-fee Ethereum transactions took place in which the sender spent around $5 million. Mining pools Ethermine and SparkPool facilitated each of the two transactions. They both first waited for the sender to reach out, later Ethermine distributed the fees to miners and SparkPool decided to do so on June 17 at 15:30 (GMT+8).

Since Good Cycle contacted SparkPool via the new transaction before this time limit, it remains unclear what the mining pool would decide now. The Block has reached out to both SparkPool and Ethermine and will update this story should we hear back.

It remains unclear who hacked Good Cycle and might have also blackmailed the exchange. Last week, Ethereum creator Vitalik Buterin explained the blackmail 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.”

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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