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Real reason behind Bitcoin transaction with $500,000 fee revealed

In a surprising turn of events, Paxos has come forward to take the blame for a $500,000 Bitcoin fee payment, after PayPal was accused of being the party responsible for excessive transfer fees.

Paxos comes forward as guilty party

Paxos, a New York-based blockchain infrastructure company and issuer of PayPal USD (PYUSD) and Pax Dollar (USDP), recently admitted responsibility for a large Bitcoin fee payment of $510,000, the largest ever paid in US dollars for a single Bitcoin transaction. Highest fee. ,

The story began when several blockchain sleuths noticed an unusually high Bitcoin network transaction fee of 19.89 BTC associated with a relatively small Bitcoin transfer of 0.074 BTC. Typically, BTC network fees range from $1-$5 and sometimes up to $50 when network activity is high, so fees quickly increase interest.

An analysis conducted by Mononautical, an Was identical to the address tagged in. In light of these rumors, Paxos has come forward to refute this statement and clarified that it was actually an error on their part.

Paxos has said that the substantial BTC fees were caused by a bug error on Bitcoin transfers. However, the blockchain infrastructure company has begun making plans to recoup the lost funds from the BTC miners involved in the transfer.

“Paxos overpaid BTC network fees on September 10, 2023. This only affected Paxos’ corporate operations. Paxos customers and end users are not affected and all customer funds are safe, the blockchain service provider said.

The price of BTC is $26,300. Source: BTCUSD on tradingview.com

Bitcoin miners are considering refunds

Currently, Bitcoin miners are considering refunding the significant Bitcoin network fee paid by Paxos for a 0.074 BTC transfer. The mining company involved in the transfer was Stakefish, a major validator for the proof of stake blockchain.

Chun Wang, CEO and founder of Stakefish, announced in a post on X that the person behind the highly paid BTC fee transaction must come forward and reclaim his funds within three days.

Following the announcement, a claim was made three days later, however, Wang remained uncertain about releasing the Bitcoin fee funds. He said he felt disappointed in agreeing to the reimbursement and asked whether they should split the money between miners and Paxos.

Some members of the crypto community suggested distributing the funds to miners, while others proposed dividing the funds equally between Paxos and miners. All things considered, the loss of Bitcoin fee funding is a major blow to Paxos, raising concerns about the security of the firm.

The crypto infrastructure provider has also been on the radar of the United States Securities and Exchange Commission (SEC) for allegedly violating multiple investor protection laws in issuing the BUSD stablecoin. Paxos also faces significant regulatory challenges in several jurisdictions, including Canada and New York.

Featured image from StormGain, chart from tradingview.com

source: www.newsbtc.com

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