- On October 15, 2025, at 3:12 pm EST, on-chain records show Paxos minted 300 trillion PYUSD tokens, then burned the same amount 22 minutes later.
- The error was discovered through Ethereum block explorer data; Omer Goldberg of Chaos Labs flagged it publicly, prompting Aave to freeze PYUSD trades as a precaution.
- Paxos issued a statement on X acknowledging a “technical error” during an internal transfer, denying any security breach, and assuring that customer funds are safe.
In what is being described as a moment of fat fingers, Paxos, the regulated issuer behind PYUSD, accidentally minted 300 trillion PYUSD tokens on October 15, 2025. Blockchain explorers like Etherscan picked up the anomalous mint on Ethereum at 7:12 pm UTC, when Paxos’ hot wallet issued the tokens.
The incident was first flagged by watchers in real time, and Omer Goldberg of Chaos Labs publicly announced that Aave would suspend PYUSD trading due to this “unexpected high-magnitude transaction.” Within 22 minutes, the full amount was transferred to an inaccessible “burn” address, effectively destroying it. Shortly after, Paxos made a post on X (formerly Twitter) acknowledging the mishap.
Paxos’ official statement in an X post read,
“We mistakenly minted excess PYUSD as part of an internal transfer. This was a technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.” No public comment has come yet from PayPal, which is the partner on the PYUSD stablecoin.
Impact on PYUSD & stablecoin trust
Though the net supply didn’t change because the tokens were burned, the episode raises serious questions about internal controls. Observers warn that a stablecoin system allowing uncontrolled minting can undermine confidence in its backing and operational rigor.
The peg held relatively steady, with only a brief ~0.5% dip before recovery. But the psychological damage may linger: users may demand stricter safeguards, automated checks, or hard caps to prevent recurrence.
This incident could fuel scrutiny from regulators or observers over how ‘stable’ stablecoins really are and whether human or technical error needs deeper scrutiny.
How are Paxos and PYUSD connected?
Paxos is a regulated financial infrastructure company that issues stablecoins and handles tokenization, custody, and settlement services. It is the issuer behind PYUSD (PayPal USD), a U.S. dollar–pegged stablecoin backed by reserves. PYUSD was launched in partnership with PayPal, and its supply is meant to be fully collateralized to maintain a 1:1 peg with the U.S. dollar.
Under normal operations, Paxos mints or redeems PYUSD to match user demand, ensuring every token is backed by liquid assets.
