According to a statement released by the company on September 13th, an account mistakenly paid over $500,000 in fees on September 10th for a Bitcoin transfer belonging to Paxos. Paxos assured that end users were not affected, and all user funds remain safe. Paxos is most known for being a stablecoin issuer, including PayPal USD (PYUSD) and Pax Dollar (USDP), but it also operates a cryptocurrency brokerage.
The statement comes after users on X (formerly Twitter) speculated that PayPal might be responsible for the transaction due to an associated wallet account identified by the OXT platform. A Paxos representative clarified that PayPal is not responsible for the error, stating:
“Paxos mistakenly paid excessive BTC network fees on September 10, 2023. This only affected Paxos’ operations. Paxos customers and end-users were not impacted, and all customer funds are secure. This was due to an error in a fund transfer and has been rectified. Paxos is in contact with miners to recover the funds.”
The erroneous transaction was first detected on September 10th, immediately after it occurred. According to blockchain data, the sender paid a fee of around 20 BTC (worth over $515,000 at the time) to send only 0.07 BTC (worth less than $2,000 at the time).
The block containing the transaction was confirmed by the Bitcoin mining pool F2Pool. On September 10th, F2Pool’s operators proposed refunding the funds to anyone who sent the transaction if requested within three days. Otherwise, the fees would be distributed to contributors of F2Pool’s hashing power.