News - Will Paxos recover half a million dollars in Bitcoin transaction fees?

By Luc Vesters

Will Paxos recover half a million dollars in Bitcoin transaction fees?

Bitcoin (BTC)

Last Sunday, the Bitcoin network recorded a spectacular transaction. A user paid half a million dollars for a transaction worth $2,000 worth of Bitcoin. Now the company Paxos is coming forward and identifying itself as the owner of the wallet. Paxos operates in the crypto sector as an issuer of stablecoins and has coined Binance's BUSD, among other things. Now the crypto world is debating a possible refund.

How did it happen?

On Sept. 10, blockchain watchers sounded the alarm. According to on-chain data, a Bitcoin user paid nearly 20 BTC in transaction fees for transferring just 0.074 BTC. Everything pointed to a glitch. The Paxos transaction was processed by the mining pool f2. Its founder, Chun Wang, earlier this week gave the culprit three days to identify himself and said he would likely get his money back.

On Sept. 13, Paxos claimed the transaction. The incident occurred "due to a bug affecting a single transfer and has since been fixed," the company told Decrypt. Paxos dismissed speculation that PayPal was behind the transaction. The false suspicion was based on on-chain analysis by blockchain forensics expert Mononaut.

The decision lies with the miners

Miners can refund fees as a gesture of goodwill, but are not obliged to do so. With Chun Wang, Paxos has clearly found a difficult negotiating partner. He wrote today, Sept. 14, that he was "irritated" and "regretted agreeing to the refund." Now he is making Paxos hesitate by making the negotiations public and letting his X followers vote on what would be best. Pay back, divide among the miners, split 50-50 or freeze the nearly 20 BTC?

Wang sometimes attributes his dissatisfaction to a trivial issue. The person claiming the refund used the wrong abbreviation for the time zone: EST instead of EDT/UTC. "The last time a Zcash man did that, I blocked his entire business," he said. It is unclear whether the pool operator likes it, wants to benefit from media exposure or is serious. Also whether the X result will influence his decision. X users can vote until midnight.

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