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Crypto Community Torn on Huge Paxos Bitcoin Fee: Return It or Give to Miners?

2 mins
Updated by Kyle Baird
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In Brief

  • Crypto services provider Paxos identified as the entity behind a massive 20 BTC transaction fee, sparking debate in the crypto community.
  • The large fee, labeled as a "fat finger" mistake, was due to a bug on a single transfer; Paxos is in contact with the miner to recoup funds.
  • A poll reveals 36% of respondents believe the fee should go to miners, while 29% suggest refunding Paxos; some suggest a 50/50 split.
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The crypto community has been discussing what should happen to the largest Bitcoin transaction fee ever recorded. Moreover, crypto services provider Paxos has been identified as the entity responsible for the 20 BTC transaction fee.

On September 10, an unidentified entity paid a whopping fee of 19.89 BTC worth around $500,000 at the time to move just 0.008 BTC.

Paxos Fingered in Fat Finger Bitcoin Fee Mistake 

The massive fee has sparked discussion among the crypto community. Furthermore, Paxos has been identified as the culprit for the huge fee. The transaction was initially thought to be linked to payments giant PayPal

A company spokesperson confirmed this, “Paxos overpaid the Bitcoin network fee on September 10, 2023.” 

“This only impacted Paxos corporate operations. Paxos clients and end users have not been affected and all customer funds are safe.”

The transaction has been labeled as a “fat finger” mistake, which is a human error caused by pressing the wrong key when using a computer to input data.

The big fee was “due to a bug on a single transfer, and it has been fixed,” according to Paxos. The firm added that it is in contact with the miner to recoup the funds.

On September 14, mining pool F2Pool co-founder Chun Wang said he regretted agreeing to the refund. His comments also referenced the confusion with the time zone. F2Pool processed the BTC transaction. 

“I was annoyed and regretted agreeing to refund that 20 BTC. Especially when I saw the person claiming it kept saying EST instead of EDT/UTC.”

50/50 Split an Amicable Outcome 

He added a poll asking the crypto community what he should do with the BTC.

At the time of press, around 36% of the 1,400 respondents said it should be distributed to the miners. Around 29% said that it should be refunded to Paxos. 

Cosmos developer “chjango.cosmos,” said 50/50 seems reasonable. They added that 50% should go to the network miners who would have gotten it otherwise.

The other half should go back to Paxos, they said before adding: 

“They’ve been around long enough to know better than to make such an amateur mistake.”

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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