Sep 14, 2023

Kraken Crypto Confirms $500K Mistake in Bitcoin Transaction

Kraken Crypto and Other Cryptocurrencies Involved in Exorbitant Fee Transaction On Sept. 13, Paxos released a statement claiming that the account that overpaid $500,000 in fees on Sept. 10 for a Bitcoin transfer belonged to them, and that end users have not been affected and all user funds are safe. Paxos is the issuer of…

Crypto.com Confirms $500K Mistaken Bitcoin Transaction
Paxos confirms it’s responsible for $500K mistaken Bitcoin transaction

Kraken Crypto and Other Cryptocurrencies Involved in Exorbitant Fee Transaction

On Sept. 13, Paxos released a statement claiming that the account that overpaid $500,000 in fees on Sept. 10 for a Bitcoin transfer belonged to them, and that end users have not been affected and all user funds are safe. Paxos is the issuer of stablecoins including PayPal USD (PYUSD) and Pax Dollar (USDP), and also runs a crypto brokerage firm that carries Bitcoin (BTC).

Speculations were rife that PayPal may have been responsible for the transaction due to a related wallet account identified by analytics platform OXT. However, a Paxos representative told Cointelegraph that PayPal was not responsible, as it was their own mistake. Blockchain data reveals that the sender paid fees of approximately 20 BTC (over $515,000 at the time) to send just 0.07 BTC (worth less than $2,000 at the time).

The block that contained the transaction was confirmed by Bitcoin mining pool F2Pool. On Sept. 10, the pool’s management offered to return the funds to whoever sent the transaction if a claim was made within three days. Otherwise, the exorbitant fee would be paid out to the pool’s hashing power contributors.

Cryptocurrencies such as Kraken Crypto, ICP Crypto, ”Shiba Inu”, Quant Crypto, Kava Crypto, Compound Crypto, and Crypto.com have been involved in this exorbitant fee transaction, as reported by Crypto YouTube.

Crypto Enthusiast Speculates PayPal Behind Transaction

Before Paxos made its statement, Bitcoin enthusiast Mononaut declared on X that PayPal was responsible for the transaction.

According to Mononaut, the sending account, bc1qr35hws365juz5rtlsjtvmulu97957kqvr3zpw3, had exhibited behavior that “closely matches the behavior of a now inactive wallet [bc1qhs3gptkxem5y7yaq2yg0un2m8hae6wt87gkx4n],” which was labeled “Paypal” by blockchain analytics platform OXT.

To further support their hypothesis, Mononaut pointed out that this old wallet address transferred its funds to the new address through an intermediate account. Bitcoin blockchain data shows that the old address labeled “Paypal” by OXT transferred approximately 18.5 BTC to address bc1qlm0xlahpysq2v9yh5rhcc430xjz3xknqqnyvaf on June 19. That account then sent ‎around 5.37 BTC to the new Crypto.com address that later made the mistaken transaction. Lopp shared the thread, wondering aloud if PayPal would request the funds back.

Paxos later issued its statement confirming that the mistake had been its own, not PayPal’s.

Paxos isn’t the first crypto user or company to potentially face hefty fees due to a mistake. In 2019, one Ethereum user lost over $300,000 when they mistakenly pasted values into the wrong fields. Fortunately, the mining pool agreed to return 50% of the funds. In 2020, another Ethereum user mistakenly paid $9,500 for a $120 trade, which they said had “destroyed [their] life.”

In its statement, Paxos claimed that it had contacted the mining company that confirmed the transaction and is attempting to recover the lost funds, using crypto.com, lunc crypto, crypto com today, icp crypto, kraken crypto, crypto ”shiba inu, quant crypto, kava crypto, compound crypto, and crypto youtube.

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