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Paxos Unveiled as ‘Fat Finger’ Entity in Shocking $500,000 Bitcoin Fee Mistake

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Crypto Services Provider Paxos Sets Record for Highest Bitcoin Transaction Fee

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Crypto services provider Paxos has been identified as the entity that set the record for the single highest payment for a Bitcoin transaction fee in what appeared to be a “fat finger” mistake.

The Mistake

  • An unidentified entity paid a fee of 19.89 BTC worth about $500,000 to move just 0.008 BTC ($200).
  • Bitcoin Magazine on Wednesday linked the transaction to payments giant PayPal, but later attributed the mistake to its infrastructure partner Paxos.

Paxos’ Response

“Paxos overpaid the BTC network fee on Sept. 10, 2023,” a Paxos spokesperson told The Block. “This only impacted Paxos corporate operations. Paxos clients and end users have not been affected and all customer funds are safe.”

Recovering Funds

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

The wallet that made the payment is a Bitcoin power user, having sent and received more than 120,000 transactions. It has until today to try and reclaim the transaction fee from F2Pool, the Bitcoin mining pool that processed the transaction.

A person with knowledge of the situation attributed the error to Paxos and confirmed to The Block that PayPal hadn’t been involved.

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