Paxos mistakenly paid over $500k for one Bitcoin transaction

Blockchain infrastructure platform Paxos is said to be behind what appears to be the largest fee paid for one Bitcoin transaction.

Paxos, a New York-based regulated blockchain firm behind stablecoins PYUSD, BUSD and USDP, appears to be the entity that overpaid $500,000+ to move just 0.074 BTC (~$1,911 at that time) to Binance.

As crypto.news reported, the transaction — registered on Sept. 10 at 5:04 AM (UTC) — was first spotted by Whale Alert, a service that tracks crypto transactions. An unidentified entity paid a whopping 19.82 BTC (~$511,512), while Bitcoin’s average transaction fee at that moment was at 0.000084 BTC (~$2), according to IntoTheBlock data.

Later, an X user under the alias mononaut said it was PayPal who paid the fees, which was thought to be a “fat-fingered” mistake at that time.

However, a spokesperson for PayPal later told media outlets that its infrastructure partner Paxos was responsible for the overpayment.

“This was due to a bug on a single transfer and it has been fixed. Paxos is in contact with the miner to recoup the funds.”

PayPal

Crypto.news contacted Paxos for details. The spokesperson for the company revealed that this only impacted Paxos corporate operations. Paxos clients and end users were unaffected, and all customer funds were safe. This was due to a bug on a single transfer, which was fixed.

Although the incident is a record for the Bitcoin ecosystem, it’s not the first time someone has paid enormous fees for a single transaction.

For example, a similar incident happened in September 2021 when someone at DeversiFi, an Ethereum-based exchange, also paid a massive 7,676 ETH (currently worth $12.3 million) in fees to move $100,000. The erroneous fee was later refunded.