Paxos admits to being behind the overpaid Bitcoin transfer
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Paxos admitted to being responsible for a Bitcoin transaction that sent 0.07 BTC while paying 20 BTC for it, said Cointelegraph in its recent report.
The error was discovered on September 10, according to the company, shortly after it was made. After learning of it, Paxos revealed its participation in a statement on September 13.
Paxos clients were not affected
The company claims that none of its users have been affected by the incident. Paxos also confirmed to Cointelegraph that the error was not made by PayPal, but rather, it was an internal issue.
Its statement, published in a recent Cointelegraph report, says: “Paxos overpaid the BTC network fee on Sept. 10, 2023. This only impacted Paxos’ corporate operations. Paxos clients and end users have not been affected, and all customer funds are safe. This was due to a bug on a single transfer that has been fixed. Paxos is in contact with the miner to recoup the funds.”
After the payment was made, it quickly attracted the attention of the crypto industry. The industry has seen countless cases where millions of Bitcoins were sent while the accompanying transaction fees were only a few cents. This was the first time that a smaller amount — around $2,000 — was moved for a fee as massive as $515,000, according to prices at the time.
Debating about what went wrong, some, like the co-founder of the Casa wallet, Jameson Lopp, suggested buggy software.
The transaction that paid nearly 20 BTC ($500,000) fee a few hours ago looks like an exchange or payment processor with buggy software.
They've received 60,000+ txns and sent 60,000+ txns from the same address (bad practice) and likely calculated their change output incorrectly. pic.twitter.com/s44Yc8S2ia
— Jameson Lopp (@lopp) September 10, 2023
Others, like the crypto developer Mononaut, had suggested that it may have been an issue caused by PayPal, which is why Paxos quickly confirmed that this is not the case and that Paxos itself made the mistake.
🚨🚨🚨 BREAKING 🚨🚨🚨
The fat fingers belong to PayPal https://t.co/pKN0w5SfKB— mononaut (@mononautical) September 13, 2023
Paxos confirms: It was not PayPal’s fault
In its report, Cointelegraph explains that the confusion came from the fact that the sending account behaved similarly to an inactive wallet whose address was labeled PayPal by a blockchain analytics platform, OXT.
Soon after Paxos admitted its error, an X account Whale announced that the miner who processed the BTC transaction had returned $500,000 to Paxos after learning of what happened.
JUST IN:
Miner returns over $500k in BTC transaction fee overpayment to Paxos
— Whale (@WhaleChart) September 15, 2023
