A technical malfunction at Paxos briefly flooded the Ethereum blockchain with an astronomical 300 trillion PayPal USD (PYUSD) tokens on Wednesday, a value equivalent to $300 trillion at the stablecoin’s dollar peg. The error, which occurred at 3:12 p.m. ET, was identified and resolved within 30 minutes, as Paxos executed a full burn of the excess supply.
In a statement on X, Paxos confirmed the event was caused by an internal issue.
“At 3:12 PM EST, Paxos mistakenly minted excess PYUSD as part of an internal transfer,” the company said. “This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.”
Blockchain data shows rapid Mint and burn
According to Etherscan, the faulty mint originated from a Paxos hot wallet and was directed to PayPal’s PYUSD smart contract. Within roughly 22 minutes, the entire 300 trillion tokens were sent to an inaccessible burn address.
The brief creation of tokens, exceeding both the U.S. national debt of about $37 trillion and global GDP of roughly $117 trillion, drew immediate attention across the crypto community.
DeFi markets react
Following the incident, Aave temporarily froze its PYUSD markets as a precautionary measure. Omer Goldberg, founder of Chaos Labs, confirmed on X that Aave halted PYUSD trading after detecting an “unexpected high-magnitude transaction.” PYUSD’s price dipped slightly, deviating by about 0.5% from its $1 peg, before quickly returning to parity once the excess supply was removed.
Paxos subsequently minted 300 million PYUSD as part of its normal operations later that day.
Industry reactions and concerns
The crypto industry responded swiftly, with many users expressing disbelief at the scale of the mint. Community members joked that Paxos had printed enough PYUSD to pay off global debt, while others raised deeper questions about internal controls.
Paxos intern be like: $PYUSD pic.twitter.com/oqfyB9sSTb
— 长人工尺口 (@kairo8080) October 15, 2025
Regulatory experts also noted the broader implications. Amanda Fischer of Better Markets questioned whether the mistake could influence ongoing discussions around stablecoin oversight, saying that such incidents “illustrate why regulators must examine systems that can instantly alter global money supply, even by mistake.”
Stablecoin oversight back in focus
The event comes as Paxos pursues a national trust charter from the U.S. Office of the Comptroller of the Currency. The firm, which issues several prominent stablecoins, including PYUSD in partnership with PayPal, may now face intensified scrutiny over its internal safeguards.
Despite the temporary market disruption, Paxos reiterated that no user funds were compromised and that the issue was fully contained.
As of publication, PayPal has not issued an official comment on the incident. PYUSD remains one of the largest stablecoins in circulation, ranking sixth globally with a market capitalization of about $2.6 billion, according to CoinMarketCap.
Kristian Koch
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