Paxos Experiences Massive Technical Glitch, Accidentally Issues 300 Trillion PYUSD Paxos по ошибке выпустил 300 трлн PYUSD.

On October 15, the stablecoin infrastructure provider Paxos inadvertently released 300 trillion PYUSD from PayPal.

The cause behind this error was an internal technical glitch, not a security breach, as stated by company representatives. The issue was resolved within 30 minutes—Paxos burned all the erroneous tokens and minted 300 million PYUSD.

This incident led to temporary disruptions in the operations of DeFi protocols. As a precautionary measure, Aave suspended transactions involving PayPal’s stablecoin.

Consequently, the value of PYUSD briefly lost its peg to the US dollar, but quickly rebounded once the error was rectified.

The amount issued was several times larger than the current US national debt ($37 trillion) and the world’s GDP ($117 trillion), and was comparable to the total global debt.

Users expressed concerns that a «backed asset can be issued without actual collateral.»

«But an even more alarming aspect is that if the issuer can create tokens so easily ‘out of thin air,’ what prevents them from arbitrarily destroying any coins in the system—even legitimate ones? This implies that purchasing PYUSD requires us to blindly trust that the company won’t burn our tokens—either mistakenly or intentionally,» added one user.

Similar errors have occurred in the past. In 2019, Tether, the company behind USDT, mistakenly issued 5 billion tokens on the TRON blockchain and immediately destroyed them. Instead, the issuer was supposed to mint 50 million tokens for the bitcoin exchange Poloniex.

In May 2021, the crypto lender BlockFi mistakenly credited clients’ accounts with large amounts of bitcoin and later requested them back. The issue stemmed from a promotional campaign meant to reward in GUSD stablecoins.

In December 2022, during a transaction on the DeversiFi decentralized exchange involving 100,000 USDT on the Ethereum network, the gas fee amounted to $23.7 million, which turned out to be a mistake—subsequently, the miner refunded the entire amount.

Recall that in September of this year, Paxos proposed the launch of USDH—the first stablecoin in the Hyperliquid ecosystem. However, the competition was won by the issuer Native Markets.