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2h ago

Paxos Erroneously Mints $300 Trillion in PYUSD, Burns It Within Minutes

The brief on-chain surge exposes gaps in issuer controls, raising questions for Paxos’ OCC charter application.

Is Paxos about to settle the world’s debt with this $300T mint?
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Overview

  • Paxos said a technical mistake in an internal transfer led to the 3:12 p.m. ET mint on Oct. 15, with all excess PYUSD sent to a burn address about 20–22 minutes later and no security breach reported.
  • On-chain data from Etherscan and Arkham showed a Paxos hot wallet interacting with the PYUSD contract for the mint-and-burn sequence, leaving no net change in circulating supply.
  • DeFi platform Aave temporarily froze PYUSD markets as a precaution during the incident, and the stablecoin’s price briefly slipped before returning to its $1 peg.
  • Industry voices and auditors flagged weak operational safeguards around mint privileges, urging measures such as multi-party approvals, mint caps, rate limits, and on-chain proof-of-reserve checks.
  • The episode arrives as Paxos seeks a national trust charter under the GENIUS Act, with PYUSD holding roughly a $2.6 billion market cap and PayPal’s blockchain lead reiterating 1:1 dollar backing.