Insanity: Ethereum Wallet Pays Nearly $575,000 in Fees to Transfer $25 in ETH
Strange things occur in the cryptocurrency market. Prices spike following negative news, and positive news is met with a strong sell-off. Cryptocurrency exchange founders are accused of faking their own deaths and making off with their customer’s assets. But not much is stranger than seeing someone pay over $300,000 in fees to send a mere fifteen bucks worth of Ether.
Recent transactions have been discovered on the Ethereum blockchain that show a transaction for 0.1 Ether, valued at approximately $14.80 at the time the transaction was sent by paying 2,100 ETH in fees.
Mysterious Ethereum Account Sends 0.1 Ether, Pays 2,100 ETH in Fees
The cryptocurrency community is running wild with speculation as to why a mysterious Ethereum wallet sent 0.1 ETH while paying an astronomical 2,100 ETH in fees. The fees total over $302,000 at today’s Ethereum price of $144, while the Ether itself that was sent is just a measly $14.40.
Someone just paid 2100 ETH for transaction fees.
That is over $300,000 spent to transfer $15.
Did they mistaken the fee with sending value? pic.twitter.com/Te1NKlcD6K
— Alec Ziupsnys (@AlecZiupsnys) February 19, 2019
At first glance, the sender appears to have made a user error, incorrectly swapping the transaction fee with the full value they were attempting to send. Crypto users commonly make mistakes when sending crypto to one address to another, occasionally even sending crypto to the wrong asset type or wallet address. It’s the reason it is always recommended users double- and even triple-check the receiving address before hitting send and signing a transaction.
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Taking a journey down the rabbit hole of an Ethereum wallet, keen-eyed crypto users discovered that this wasn’t the only transaction like this example. In just one day, the wallet address sent 0.170000000000000002 ETH or roughly $24, for a total of 3990.00000000000004 ETH in fees. The fees total nearly $575,000 at today’s prices.
The account either has money to burn, is driven by a malfunctioning bot, or potentially has an ulterior motive. What that motive is, though, is yet to be understood, however, crypto sleuths everywhere are on the case.
Are the Strange Ethereum Transactions Tied to Money Laundering?
Some speculate that the high amount of fees are being used to launder money in some way. The Twitter account for the decentralized exchange Saturn Network explains how the transaction fees could be used to wash dirty funds so they appears as “honest miner income.”
that's money laundering. You do not broadcast this tx, you mine the block with this tx yourself. Once the block is included in the blockchain it is no longer dirty stinky stolen ether. It is honest miner income.
— Saturn Network (@SaturnProtocol) February 20, 2019
The transaction wasn’t publicly broadcasted, which could suggest that the block the transaction was in was mined by a complicit miner.
Related Reading | Etheruem Rally Takes a Break, Still Bullish Above $144
Whatever the case may be, the wallet is either sending these transactions on purpose for one reason or another – potentially to launder money – or is repeatedly making some extremely expensive mistakes. One thing is for sure: these transactions were sent with some of the fastest speeds the Etheruem blockchain has seen.
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