Miner returns over $500K in BTC transaction fee overpayment to Paxos

A Bitcoin (BTC) miner who received 19.8 BTC in fees from blockchain infrastructure firm Paxos has returned the funds after it claimed the company made a mistake in paying over $500,000 in transfer fees.

F2Pool have sent the 19.82108632 BTC fee overpayment back to Paxos https://t.co/IB32RNq5uO

— mempool (@mempool) September 15, 2023

On Sept. 10, the crypto community was puzzled after seeing a BTC transaction that paid around $500,000 in fees to move around $2,000, with the average network fee around $2. Various 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, Paxos announced that it was its server that made the transfer. Following its claim, the company assured its users that their funds were safe and belonged to Paxos. The company also clarified that PayPal was not involved in the mistake and admitted that the error was its own.

Almost a day after Paxos’ claims, the Bitcoin miner who received the funds went on X (formerly Twitter) to express frustrations after agreeing to refund the amount to Paxos. The miner asked their X followers what they would do in their place, and a majority voted to just distribute the money to other Bitcoin miners.

However, this advice doesn’t appear to have been taken. Blockchain data shared by Bitcoin explorer Mempool confirmed that the funds were indeed returned on Sept. 15.

Related: How to strike a balance between blockchain transparency and privacy: Nansen CEO

Thousands of dollars in transaction fees have been lost in mistakes before. Back in 2019, an Ethereum user lost almost $400,000 in Ether (ETH) after pasting values in the wrong fields. Luckily, the Ethereum mining pool Sparkpool helped the user recover half of the funds lost.

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