Stablecoin issuer Paxos accidentally overpaid $510,750 on a single Bitcoin transaction fee on September 10. That is according to a spokesperson from PayPal, the issuer’s infrastructure partner.
“Paxos overpaid the BTC network fee on Sept. 10, 2023,” the spokesperson says. “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 and it has been fixed. Paxos is in contact with the miner to recoup the funds.”
This is the largest fee ever for a Bitcoin transaction in dollar terms. Paxos usually determines fees by market demand, as well as network congestion. They can vary significantly, but a fee exceeding $500,000 for such a small transaction is highly unusual.
According to blockchain data, the sender paid fees of approximately 20 BTC (over $515,000 worth at the time) to send just 0.07 BTC (worth less than $2,000 at the time). In a statement, Paxos claims that it had contacted the mining company that confirmed the Bitcoin transaction and is attempting to recover the lost funds.
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PayPal did not notice the overpayment for over 24 hours, perhaps signaling issues of monitoring on the payment giant’s end.