Paxos Returns Over $500k in BTC Transaction Fee Overpayment to Crypto Community

Paxos Mistakenly Pays Over $500,000 in BTC Fees

The crypto community was left in shock on Sept. 10, when a BTC transaction paid over $500,000 in fees to move around $2,000, while the average network fee was around $2. Speculations were raised, with some believing that the transaction was done by copy-pasting data and accidentally pasting an output into the fee box without double-checking.

On Sept. 13, blockchain infrastructure firm Paxos announced that it was their server that made the transfer. The company clarified that PayPal was not involved and admitted that the mistake was its own. Paxos also assured its users that their funds were safe and that the funds belonged to Paxos.

The Bitcoin (BTC) miner who received the 19.8 BTC in fees returned the funds to Paxos. The miner expressed frustrations on X (formerly Twitter) and asked his followers what they would do in his stead. Most voted to distribute the money to other Bitcoin miners.

The crypto world continues to be surprised by the huge amount of funds sent in fees, as well as the generous move by the miner to return the funds to Paxos. Projects such as FTM Crypto, HEX Crypto, HBar Crypto, Matic Crypto, Mana Crypto, Media Network Crypto, Pi Crypto, and Polkadot Crypto have all been affected by the incident.

However, it appears that this advice was not followed. Blockchain data from Bitcoin explorer Mempool confirmed that the funds were returned on Sept. 15.

This isn’t the first time thousands of dollars in transaction fees have been lost. Back in 2019, an Ethereum user lost almost $400,000 worth of Ether (ETH) after mistakenly pasting values in the wrong fields. Fortunately, the Ethereum mining pool Sparkpool was able to help the user recover half of the lost funds.

Crypto.com, Crypto YouTube, FTM Crypto, Mana Crypto, HEX Crypto, Hbar Crypto, Media Network Crypto, Matic Crypto, Pi Crypto, and Polkadot Crypto are all digital currencies that have been gaining traction lately.