P2P ‘Ponzi Scheme' Exchange, Good Crypto, Is Behind the $5M Transaction Fees on Ethereum

Fees paid to miners of the Ethereum network has been gaining a lot of traction lately. In 2020, it has been on an upward trend.

The total fee volume in Ether on the network increased by a whopping 336% in the past two months as mean fee volume surged from 0.00067 ETH on April 17th to 0.0027 ETH on June 15th, a spike of 300%.

However, the highlight of this fee trend was when a single transaction spent $2.5 million in fees to transfer 0.55 ETH on June 10th — the highest value ever.

The next day, a second incident was reported of another Ethereum transaction with enormous fees. This transaction was also broadcast by the same addresses and had an identical fee of 10,668 ETH.

While the first transaction was mined by SparkPool, the second one was mined by Ethermine.

Fees is Already Distributed

Ethermine has already distributed the transaction fee to the miners of its pool, after no contact from the sender for four days. The distribution was reportedly based on a miner hashrate snapshot taken at the time block 10241999.

They further clarified that in the future they will no longer interfere in the payout of large fees and will always distribute the full block reward.

Sparkpool made the same decisions and distributed the proceeds today to the miners that submitted hash to SparkPool on that day.

Today, Ethermine also announced that to prevent transactions with very high fees, the Geth team has introduced a new safety feature that will block sending txs with a fee of more than 1 ETH. This will only affect txs sent via RPC while “txs received via p2p are relayed normally.”

But who exactly was behind these massive fees?

Today, PeckShield, a blockchain security company updated that it was a small South Korean peer-to-peer cryptocurrency exchange called Good Cycle, which “appears to be a Ponzi Scheme project.”

PeckShield said the exchange is also lacking in security — the Good Cycle website uses HTTP protocol instead of HTTPS.

Good Cycle has sent the transaction to SparkPool and Etheremine with a message “I am the sender” but the time to distribute the fees to miners by the pool has already lapsed.

The exchange has also suffered “repeated” hacks. Last week, Ethereum co-founder Vitalik Buterin had shared his theory of a hacker being behind this million-dollar tx fees which may actually be blackmail. He said,

“The 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.”

But this theory was refuted by ZenGo, a keyless crypto wallet provider which said if it would have been blackmail, the service would “defensively halt all operations immediately when they received the ransom demand” but it continued.

Ethereum (ETH) Live Price

1 ETH/USD =$227.0561 change ~ -0.42%

Coin Market Cap

$25.34 Billion

24 Hour Volume

$1.53 Billion

24 Hour VWAP


24 Hour Change


Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Russian Court Denies Appeal for $900K Compensation for Stolen Bitcoin; It's Not Property

A victim of a kidnapping in Russia who lost $90,000 worth of Russian Rubles and 99.7 in stolen Bitcoin, appealed to the court almost...

Bitcoin Price Dullness Reflects in Difficulty that Records its Lowest Drop since 2010

For the past two months, the price of bitcoin has been stuck in a range of $8,500 and $10,000. The leading cryptocurrency has been...

Litecoin Mimblewimble Testnet on Track to September Launch

While sharing the June progress, Grin developer David Burkett who is working on Mimblewimble implementation to the Litecoin network, said the testnet launch is...

Circle and Coinbase's USDC Becomes Second Stablecoin to Hit 1 Billion Circulating Supply

USDC, the dollar-pegged stablecoin launched by Circle and Coinbase back in October 2018, has become the second stablecoin to see its circulating supply surpass...

Boomers and Gen-X Double Their Bitcoin Investment, Recording More Growth than Millennials & Gen Z

According to a study by Mode Banking, “Bitcoin investments have been doubling every month since February among Boomers and Gen-X, signaling wider crypto adoption.” Interest...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today