Sometimes even giants trip over their own feet. Paxos, a renowned stablecoin issuer, has just proven that there is no room for errors in the blockchain world – because every movement is clearly visible on the chain.
What actually happened?
On Wednesday, blockchain data showed something that made the crypto community collectively rub their eyes in amazement. Paxos issued (mined) 300 trillion PYUSD tokens (a stablecoin linked to PayPal) only to burn the entire amount 22 minutes later, sending it to an inaccessible wallet. The entire operation took only half an hour.
For comparison: this is more than twice the entire global GDP of all countries in the world according to the International Monetary Fund. Quite a typo, right?
Paxos and his lightning-fast reaction
Omer Goldberg, founder of Chaos Labs, immediately announced that the Aave protocol was temporarily freezing PYUSD trading after detecting an “unexpected high-value transaction.” After all, it’s not every day you see issuance worth hundreds of trillions of dollars.
Paxos itself quickly clarified the situation on the X platform:
We mistakenly issued excess PYUSD as part of an internal transfer. This was an internal technical error. There was no security breach. Customer funds are safe.
Pity or just fear?
PYUSD maintained its peg to the USD, although its price briefly fell by about 0.5%. Currently, the stablecoin’s market capitalization is over $2.3 billion, making it the sixth largest stablecoin on the market – behind Tether (USDT), USDC, Ethena USDe, Dai and World Liberty Financial USD.
This is not the first spectacular burn in the history of cryptocurrencies. The Bonk project burned 1.7 trillion tokens in December 2024, although their value was “only” USD 50 million. Difference? Paxos burned tokens by mistake. And this is the real lesson of blockchain transparency – every error is public, irreversible and immediately noticeable. This incident shows how critical security procedures are in the world of decentralized finance. Although Paxos quickly brought the situation under control, this event is a reminder that even the most reputable institutions must constantly improve their control systems. In an era where code is law, one mistake can become global news in minutes.
