In a show of goodwill, Bitcoin mining pool F2Pool has opted to refund the 20 BTC (approx. $510,000) network fee that Paxos overpaid for a mere 0.7 BTC (worth less than $2,000) transaction earlier this week.
F2Pool confirmed the refund on X (formerly Twitter) on September 15, saying, “after conducting identity verification, we have confirmed the ownership of these BTC, and fully refunded the fee to the sender, Paxos.” On-chain data from Mempool shows that 19.82108632 BTC has been successfully transferred to Paxos.
The Genesis
On September 10, the crypto community witnessed one of the most significant blunders in recent history after blockchain data revealed that a fee of $510,000 was paid for a BTC transfer of roughly $2,000.
While several industry experts suggested that the associated address belonged to PayPal, Paxos released a statement on September 13, confirming it is the entity behind the transaction.
Paxos cited a bug on a single transfer as the reason for the fee overpayment in its statement. At the time, the company stated that the bug had been fixed and was in contact with F2Pool for a possible refund.
Road to Recovery
Following the transaction on September 10, F2Pool, who discovered the block, offered to return the funds to Paxos if a claim was made within three days. However, on September 14, F2Pool co-founder Chun Wang said on X that Paxos made its claim after the deadline, citing confusion with the time zone.
Wang, however, launched a poll under his tweet to gather community opinion on what to do with the excess fee. The poll saw a total of 4,811 votes, with 35.9% voting that the fund be distributed to miners, 28.9% opted for a refund, 16% opted for a 50% split between miners and Paxos, and 19% voted on freezing the fund.
Despite distributing the funds to miners being the most popular option, F2Pool ultimately returned the funds to Paxos. It is important to note that miners are not obligated to return overpaid Bitcoin transaction fees. F2Pool’s decision to refund the excess transaction fee shows goodwill and could set a precedent for future occurrences.
