PayPal Exonerated: Paxos Takes Responsibility for Record Bitcoin Fee Error

Crypto services provider Paxos has inadvertently set a record for the highest payment for a Bitcoin transaction fee due to what appears to be a “fat finger” error. On September 10, an unidentified entity paid a staggering fee of 19.89 BTC, equivalent to about $500,000, to move a mere 0.008 BTC, valued at approximately $200. Initial reports suggested that payments giant PayPal was responsible for the transaction, but it has since been clarified that Paxos, a key infrastructure partner, was the actual entity at fault.

A spokesperson from Paxos addressed the incident, stating, “Paxos overpaid the BTC network fee on September 10, 2023. This only impacted Paxos corporate operations. Paxos clients and end users have not been affected, and all customer funds are secure.”

The spokesperson further explained, “This was due to a bug on a single transfer and it has been rectified. Paxos is currently in communication with the miner to recover the overpaid funds.”

The wallet involved in the transaction is recognized as a Bitcoin power user, engaging in over 120,000 transactions. The wallet holder has until today to pursue the recovery of the transaction fee from F2Pool, the Bitcoin mining pool responsible for processing the transaction.

A source familiar with the situation confirmed that the error was indeed attributed to Paxos and clarified that PayPal was not involved in the incident.

This incident highlights the critical importance of vigilance and precision in the rapidly evolving world of cryptocurrency transactions. Paxos has taken swift action to rectify the error and ensure the security of its clients’ funds. The crypto community will be watching closely as Paxos works to recover the overpaid transaction fee.

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