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IPFS News Link • Hacking, Cyber Security

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

• https://news.bitcoin.com, 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.


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