Ouch! Ethereum User Overpays $90,000 in Gas Fees for $2,200 Transfer

TLDR

An unknown crypto user accidentally spent $90,000 in gas fees to transfer $2,200 worth of Ether (ETH).
The user spent 34.26 ETH in gas fees (worth $89,200) to transfer 0.87 ETH (worth $2,262).
Current gas fees on the Ethereum network are at yearly lows, meaning a normal transfer should only cost around $5.
This incident is an example of a “fat finger” transaction, which is not uncommon in the crypto space.
While likely accidental, such transactions could potentially be used for sophisticated money laundering.

An anonymous user recently made a costly error while attempting to transfer Ethereum (ETH). What should have been a simple $2,200 transfer turned into a $90,000 mistake, highlighting the potential pitfalls of handling digital assets.

According to data shared by pseudonymous user DeFiac on social media platform X, the unidentified crypto user spent 34.26 ETH in gas fees, equivalent to approximately $89,200 at current prices, to transfer just 0.87 ETH, worth a mere $2,262. This represents an overpayment of more than 1,783,900% compared to the typical cost of such a transaction.

Someone just burned ~$90k on tx fee for a simple eth transfer. pic.twitter.com/R9beCnNZv1

— DeFiac (@TheDEFIac) August 11, 2024

The incident occurred at a time when gas fees on the Ethereum network are hovering at yearly lows of between 2 and 4 gwei. Under normal circumstances, transferring ETH should cost no more than $5. This stark contrast underscores the magnitude of the user’s error.

This type of mistake, often referred to as a “fat finger” transaction in the crypto community, is not unprecedented.

Similar incidents have occurred in the past, involving both individual users and even established crypto exchanges.

For instance, in October 2023, an NFT trader paid 1,055 ETH (worth $1.6 million at the time) for an NFT that only cost $1,000.
In another case, an OpenSea collector spent 100 ETH ($191,000) on a free NFT mint.
In May 2021, Singapore-based crypto exchange Crypto.com accidentally sent $7 million to an Australian user, Thevamanogari Manivel. Manivel used the funds to purchase a multimillion-dollar mansion and sent around $4 million to an overseas bank account. She was later sentenced to 209 days in jail for “dealing in the proceeds of crime.”

While such overpayments are often attributed to user error, some experts suggest that they could potentially be used for more nefarious purposes.

In theory, a sophisticated form of money laundering could involve intentionally overpaying gas fees. This would require the user to be aware of which Ethereum validator would be processing the transaction and ensure it was submitted in the correct block. The user would also need to work closely with that validator to ensure the funds were not distributed incorrectly.

However, the likelihood of this scenario is relatively low. According to an October 2023 report by crypto staking firm Northstake, total illicit and high-risk activity on three Ethereum staking protocols and some areas of the mainnet ranged between 0.46% and 1.56%.

While these numbers are small, they do raise concerns among regulated entities looking to explore liquid staking protocols and Ethereum-based decentralized finance.

The post Ouch! Ethereum User Overpays $90,000 in Gas Fees for $2,200 Transfer appeared first on Blockonomi.