Paxos claims responsibility for $500K transaction fee error Paxos claims responsibility for $500K transaction fee error
Earlier reports suggested that PayPal may have owned the wallet associated with the overpayment, but a spokesperson confirmed Paxos to be behind the transaction.
1 min read
Updated: Sep. 14, 2023 at 1:12 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Paxos has claimed to be responsible for an oversized Bitcoin (BTC) transaction fee in a statement to CryptoSlate on Sept. 13.
The transaction in question took place on Sept. 10. The company attempted to send 0.07 BTC (about $2,000) but included a fee of 20 BTC (about $500,000).
A Paxos spokesperson said:
“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.”
The representative added that the transaction resulted from a “bug on a single transfer [that] has been fixed” but did not provide further details. Most speculation suggests that a bug exists in a Bitcoin wallet rather than on the Bitcoin blockchain itself.
The Paxos spokesperson added that the firm is trying to recover the fee through a Bitcoin miner. A member of the mining pool responsible for processing the transaction said on Sept. 10 that they would pause the transaction and wait for the sender to claim the fee; otherwise, they intend to redistribute the fee to other Bitcoin miners.
Earlier speculation suggested PayPal involvement
Early speculation suggested that the address that sent the oversized fee belonged to PayPal. That speculation originated with Twitter/X user Mononaut, who noted that the address behind the latest transaction engaged in behaviors that resembled activity on a defunct address tagged as belonging to PayPal on OXT.me.
Furthermore, Mononaut suggested that funds were migrated between the two Bitcoin addresses through an intermediate address.
Paxos and PayPal do have a working relationship, with the latter having chosen Paxos to issue its PYUSD stablecoin last month. A Paxos spokesperson declined to state whether the address has any relation to PayPal.
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Posted In: Exchanges
Author 
Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Paxos
Paxos Trust Company, LLC is a regulated blockchain infrastructure company building transparent and transformative financial solutions.
PayPal
PayPal is an American multinational financial technology firm that operates an online payment system in most countries that permits online money transfers and serves as an electronic replacement for conventional paper methods like checks and money orders.