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ETH · 2w

ETH $2.6M transaction fee sender comes clean

The sender of the two separate ETH transactions with a $2.6 million transaction fee attached has been revealed. South Korean peer-to-peer exchange Good Cycle has confirmed that they are the sender. On June 17, Good Cycle sent both Ethermine Pool and SparkPool a transaction from the address that sent the June 10 and June 11 transactions that said: “I am the sender.” 

What took so long?

Blockchain analytics firm PeckShield discovered that Good Cycle was the sender before Good Cycle reached out to Ethermine Pool and SparkPool themselves.

Update: We have identified the victim, a small P2P exchange in Korea called Good Cycle, which appears to be a Ponzi Scheme project. Our investigation found that their security is really lacking, e.g., using HTTP instead of HTTPS, and could be easily hacked. — PeckShield Inc. (@peckshield) June 16, 2020

Peckshield said Good Cycle appears to be a Ponzi scheme, noting that its website has very weak security. The Good Cycle website even has a notice saying that they suffered from repeated hacks.

During Peckshield’s research, PeckShield’s vice president of research, Chiachih Wu, sent a transaction to the Good Cycle exchange. Wu noticed that the amount they sent to Good Cycle was immediately sent to the wallet address that sent the transactions that had the $2.6 million transaction fees attached, this indicated that Good Cycle is indeed the owner of the wallet. 

Will Good Cycle get a refund?

Ethermine Pool and SparkPool, the two Ethereum block reward transaction processors, that processed Good Cycle’s June 10 and June 11 transactions—with $2.6 million transaction fee attached to each transaction—were interested in coming to a resolution with the transaction sender. Both transaction processors believed that a transaction with an abnormally large transaction fee had to be a mistake. 

However, after four days, Ethermine Pool distributed the transaction fee amongst its miners. On June ...

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