Paxos Confirms $510K BTC Fee was Bug, Says Miner Talks Ongoing to Recoup Overpayment

Paxos confirms it was responsible for $510k BTC transaction fee, calling it a bug that has been fixed
The excessive fee was paid on Sept. 10, impacting a single BTC transfer for Paxos' own operations, not clients
Speculation initially pointed to PayPal as the source, since it uses Paxos to custody crypto assets
Blockchain analysis of the wallet address matched known PayPal behavior, though Paxos was behind it
Paxos says it is in talks with the miner who received the fees to try to recoup the overpayment

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Relevant topic timeline:

9/13/2023

Paxos Confirms $500K Bitcoin Overpayment Was Internal Error, Not PayPal's

Paxos, a stablecoin issuer, revealed that it was the account that overpaid $500,000 in fees for a Bitcoin transfer, dispelling speculation that PayPal was responsible, and stating that all user funds are secure.

9/14/2023

Bitcoin Bug Results in $500K Fee for $2K Transaction, Paxos Seeks Refund from Miners After Costly Mistake

Bitcoin miners are considering refunding a $500,000 bitcoin fee paid by Paxos for a $2,000 transaction due to a bug, with different options being considered for the distribution of the fee.

9/15/2023

Bitcoin Mining Pool Refunds $520,000 Transaction Fee for $2,000 Transfer After Community Discussion

Bitcoin mining pool F2Pool has returned 19.8 bitcoin (BTC) to Paxos after a $520,000 fee was paid on a $2,000 transaction due to a "bug," with the refund being praised as a cooperative and humane decision by the bitcoin community.

9/16/2023

Paxos Paid $500K in Fees to Move $2K in Bitcoin; Gemini Earn Users May Recover Funds

Paxos returns $500,000 bitcoin fee, FTX digital assets approved for sale, and Gemini proposes a recovery plan for Genesis Global creditors.