Paxos admits responsibility for $500,000 Bitcoin transaction error By Investing.com
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Crypto firm Paxos has admitted to mistakenly overpaying a transaction fee of around $500,000 on a (BTC) transfer that occurred on September 10. The admission came on Wednesday, following widespread speculation about the identity of the party responsible for the error. Paxos clarified that the excessive fee was due to a bug affecting a single transfer and assured that all customer funds are safe, with the incident only impacting their corporate operations.
The company’s statement followed rumors that PayPal (NASDAQ:) might have been responsible for the transaction, due to a related wallet account identified by analytics platform OXT as belonging to PayPal. However, Paxos clarified that PayPal was not involved in the mistake.
Following the transaction, the Bitcoin mining pool F2Pool confirmed the block containing the transaction. The pool’s management offered to return the funds to whoever sent the transaction if a claim was made within three days; otherwise, the exorbitant fee would be distributed to the pool’s hash power contributors.
The mistaken transaction was first discovered shortly after it occurred. Blockchain data showed that the sender paid fees of approximately 20 BTC (over $515,000 worth at the time) to send just 0.07 BTC (worth less than $2,000 at the time). Casa wallet co-founder Jameson Lopp suggested that the sending account appeared like an exchange or payment processor with buggy software as it had made over 60,000 transactions from the same address.
Paxos is currently negotiating with F2Pool, who received the inflated fee, in an attempt to recover the overpaid amount. The company is best known as an issuer of stablecoins, including PayPal USD (PYUSD) and Pax Dollar (USDP), and also operates a crypto brokerage firm that carries Bitcoin.
This is not the first instance of users or companies paying high fees due to mistakes. In 2019, an user lost over $300,000 when he mistakenly pasted values into the wrong fields. In another instance in 2020, an Ethereum user paid $9,500 for a $120 trade due to a mistake.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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© Reuters
Crypto firm Paxos has admitted to mistakenly overpaying a transaction fee of around $500,000 on a (BTC) transfer that occurred on September 10. The admission came on Wednesday, following widespread speculation about the identity of the party responsible for the error. Paxos clarified that the excessive fee was due to a bug affecting a single transfer and assured that all customer funds are safe, with the incident only impacting their corporate operations.
The company’s statement followed rumors that PayPal (NASDAQ:) might have been responsible for the transaction, due to a related wallet account identified by analytics platform OXT as belonging to PayPal. However, Paxos clarified that PayPal was not involved in the mistake.
Following the transaction, the Bitcoin mining pool F2Pool confirmed the block containing the transaction. The pool’s management offered to return the funds to whoever sent the transaction if a claim was made within three days; otherwise, the exorbitant fee would be distributed to the pool’s hash power contributors.
The mistaken transaction was first discovered shortly after it occurred. Blockchain data showed that the sender paid fees of approximately 20 BTC (over $515,000 worth at the time) to send just 0.07 BTC (worth less than $2,000 at the time). Casa wallet co-founder Jameson Lopp suggested that the sending account appeared like an exchange or payment processor with buggy software as it had made over 60,000 transactions from the same address.
Paxos is currently negotiating with F2Pool, who received the inflated fee, in an attempt to recover the overpaid amount. The company is best known as an issuer of stablecoins, including PayPal USD (PYUSD) and Pax Dollar (USDP), and also operates a crypto brokerage firm that carries Bitcoin.
This is not the first instance of users or companies paying high fees due to mistakes. In 2019, an user lost over $300,000 when he mistakenly pasted values into the wrong fields. In another instance in 2020, an Ethereum user paid $9,500 for a $120 trade due to a mistake.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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