Overpayment Of $500K In Bitcoin Fees On A $2K Transfer

Paxos, the issuer of stablecoins such as PayPal USD (PYUSD) and Pax Dollar (USDP), has confirmed responsibility for the recent incident involving a $500,000 overpayment in Bitcoin fees. Initially, it was suspected that PayPal was behind the transaction, but Paxos stated that the problem was their own.

Paxos made the error on September 10 when it overpaid the Bitcoin network fee. However, the business assured customers that the event only affected Paxos' corporate operations and that customer payments were safe and not impacted.

The transaction came to light when blockchain data revealed that fees of approximately 20 BTC (over $515,000 at the time) were paid for a transfer of just 0.07 BTC (worth less than $2,000).

Bitcoin enthusiast Mononaut had suggested that PayPal might be involved, pointing out similarities between the sending account and an inactive wallet labeled "Paypal" by analytics platform OXT. However, Paxos' statement clarified that PayPal was not responsible for the transaction.

Paxos is now working with the mining company to rectify the situation and recover the excess fees paid.