News Roundup — Bitcoin Miner Returns the $510,000 Overpaid Transaction Fee

Major news stories this week;

1. Bitcoin Miner F2Pool Returns to Paxos the Overpaid Transaction Fee Worth $510,000
2. Hacker Steals Over $690,000 After Hijacking Vitalik Buterin's Twitter Account
3. Court approves sale of FTX digital assets, up to $3.4B worth to be unleashed
4. Franklin Templeton files for spot Bitcoin ETF
5. PayPal Launches Crypto to USD Off-Ramps

Story Summaries;

1. Bitcoin miner F2Pool has successfully reversed a recent erroneous bitcoin transaction that resulted in an excessively high transaction fee of $510,000, almost 480,000 times the average network fee of $2.176. The responsible party, Paxos, acknowledged its error and identified it as a bug in a single transfer. According to on-chain data from Mempool on X, F2Pool has sent the 19.82108632 BTC fee overpayment back to Paxos. This refund comes after extensive discussions within the bitcoin community, with figures like Stake.fish founder Chun Wang expressing regret over agreeing to the refund with Paxos. On September 10, 2023, Paxos attempted to transfer a modest 0.074 BTC, valued at less than $2,000. However, an error occurred, resulting in a transaction fee of 19 BTC, equivalent to approximately $510,000. This anomaly marked the highest transaction fee ever recorded on the bitcoin network. Jameson Lopp, co-founder of CasaHODL, analyzed the incident and speculated that the mistake may have originated from a software issue within an exchange or payment processor’s address handling system. Lopp pointed out that the address in question, which had processed over 60,000 transactions, likely experienced a miscalculation in the change output, leading to the excessively high transaction fee.
2. Ethereum creator Vitalik Buterin appears to have fallen victim to a hacker on Twitter, who went on to steal $691,000 from users who followed a corrupted link posted to his feed. The hack was first noticed on Saturday when a post appeared on Buterin’s post announcing the launch of a set of commemorative non-fungible tokens (NFTs) from software provider Consensys. This malicious link—which could have been shown to many of his 4.9 million followers—prompted victims to connect their wallets to mint the NFT, but in reality, it simply created a vacuum for the hacker to make off with their funds. The post has since been deleted, but the damage was done, as a number of victims reported losing access to funds from their wallets. Within the hour, the hacker appeared to make off with more than $147,000, but that quickly increased to $691,000, according to blockchain investigator @ZachXBT.
3. The Delaware Bankruptcy Court has approved the sale of FTX digital assets. Judge John Dorsey made the ruling at a hearing on Sept. 13. Major changes were made to the draft order authorizing the sale on the previous day. FTX will be allowed to sell digital assets, excluding Bitcoin, Ether and “certain insider-affiliated tokens,” in weekly batches through an investment adviser under pre-established guidelines. There will be limits of $50 million for the first week and $100 million in subsequent weeks. There will be an option to increase the limit with prior written approval of the creditors’ committee and ad hoc committee or to raise the limit to $200 million weekly with approval of the court. Bitcoin, Ether and insider-affiliated tokens can be sold through a separate decision by FTX after 10 days’ notice to the committees and the U.S. trustee. The U.S. trustee is appointed by the United States Department of Justice.
4. Asset manager Franklin Templeton applied with the United States Securities and Exchange Commission on Sept. 12 to launch a spot Bitcoin exchange-traded fund (ETF). The S-1 registration statement comes after the SEC delayed decisions on spot ETF applications from WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise and Invesco on Aug. 31 and a court ruling on Aug. 29 that the SEC must consider Grayscale’s application to covert its Bitcoin (BTC) futures ETF into a spot ETF. According to the application, the fund would be structured as a trust. Coinbase would custody the BTC, and Bank of New York Mellon would be the cash custodian and administrator. Fund shares would trade on the Cboe BZX Exchange. The SEC’s next deadline for deciding on the application is Oct. 16.
5. Adding to its crypto product suite, payment service PayPal has launched a new off-ramp service to convert crypto tokens to USD directly from wallets into PayPal accounts. The payments giant announced on Monday that its new “Off Ramp” service is “live on MetaMask today” for U.S. users and is available to “wallets, dApps and NFT marketplaces.” In its press release accompanying the announcement, PayPal claimed that crypto users can benefit from the company’s “robust security controls and tools for fraud management, chargebacks and disputes.” The Off Ramp service is currently available for U.S. users. PayPal’s announcement follows crypto wallet MetaMask’s introduction last week of a feature enabling users to cash out their digital assets for fiat currency and send it to a bank account or PayPal account.

‍

And that’s all for last week’s news! Wishing you a great week ahead!

‍