Article Image
IPFS News Link • Hacking, Cyber Security

Ethereum's $5.2 Million Fee Scandal Explained: Exchange Held to Ransom by Hackers

•, by Jeffrey Gogo

The hackers may have gained access to the exchange's funds but failed to transfer the money into their own wallets because of a security setting that demands multiple passwords to process a transaction.

Now they have turned to blackmail, trying to arm-twist the concerned platform into paying a ransom, according to Ethereum (ETH) co-founder Vitalik Buterin.

Explaining the suspicious transactions, Buterin tweeted on June 12 that: "Hackers captured partial access to exchange key; they can't withdraw but can send no-effect txs with any gas price. So they threaten to 'burn' all funds via tx fees unless compensated."

In the last few days, three ETH transactions took place: a customer paid $2.6 million to send $134 worth of ether. Few hours later, the same individual transferred $86,000 of ETH for precisely the same fee. A third transaction by a different user paid $500,000 in fees, but it's unrelated to the blackmail attack.

Free Talk Live