Paxos Mints and Burns 300 Trillion PYUSD in Error
- Paxos minted 300 trillion PYUSD by mistake.
- PYUSD remained stable at $1 pegging.
- Aave paused PYUSD trading briefly.
Paxos Trust Company accidentally minted and subsequently burned 300 trillion PYUSD stablecoins on October 15, 2025, due to a technical error on the Ethereum network.
The incident drew attention to stablecoin issuance protocols amidst temporary market disruptions, though no permanent financial impacts occurred, maintaining PYUSD’s stability and the broader market’s equilibrium.
Paxos Trust Company made an internal error on October 15, 2025, accidentally minting and then burning 300 trillion PYUSD tokens on the Ethereum network. The error was acknowledged quickly via their official X account.
The incident involved influential stakeholders like Paxos and Aave, a key DeFi protocol. Paxos immediately corrected the issue by burning the tokens, while Aave temporarily froze PYUSD trading due to the unexpected large transaction.
The market impact was minimal since the tokens were destroyed shortly after minting. PYUSD maintained its $1 peg, and the overall market cap remained steady without any long-term shifts.
Despite the brief disruption, there were no security breaches or risks to customer funds. Gas fees for this process totaled just $2.66, exemplifying the resilience of blockchain systems even during internal errors.
Historical precedents with Tether and Bonk show similar self-correcting minting errors. Such events reinforce the importance of internal controls in cryptocurrency operations, highlighting the need for vigilance in stablecoin management.
“At 3:12 PM EST, Paxos mistakenly minted excess PYUSD as part of an internal transfer. Paxos immediately identified the error and burned the excess PYUSD. This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.” — Paxos Official X account
Future implications could include tighter regulatory scrutiny on stablecoin minting protocols. Technical upgrades might be necessary to prevent similar occurrences, boosting confidence in digital asset management practices.
