😱 Paxos’ $300 Trillion Oopsie: Stablecoins Gone Wild! 😱

Well, butter my biscuit and call me Liz Lemon, because the New York Department of Financial Services (NYDFS) just dropped a doozy! Paxos, the brains behind PayPal USD (PYUSD), accidentally minted $300 trillion-yes, TRILLION-worth of unbacked stablecoins on October 15, 2025. 🤑 NYDFS is now playing therapist to both Paxos and PayPal, because who doesn’t love a good financial freakout? 💼

This little mishap momentarily made PYUSD’s supply bigger than the entire global economy. 🤯 Yep, you read that right. The stablecoin sector is now officially more dramatic than a *30 Rock* writers’ room. 🎭

Paxos’ $300 Trillion Minting Error: When Fat Fingers Attack the Blockchain 💻

According to on-chain data, this whole fiasco started as a simple $300 million transfer between Paxos wallets. But then, someone’s pinky slipped, and BOOM-$300 trillion appeared out of thin air. 🪄 NYDFS called it a “fat-finger incident,” which is just a fancy way of saying, “Oops, my bad.” 😬 Even Citigroup’s $81 trillion mistake last year is blushing in comparison. 💸

New York Department of Financial Services, which regulates Paxos, says it is “aware of the incident and is in contact with Paxos and PayPal.” Earlier, Paxos mistakenly created $300 trillion PayPal stablecoins

– Yueqi Yang (@Yueqi_Yang) October 16, 2025

Former Salesforce engineer Sam Ramirez broke it down for us: Paxos tried to fix their first mistake by reminting the $300 million they burned. But, plot twist! They messed up again and minted 300 trillion instead. 🤦‍♂️ It’s like trying to fix a broken printer by setting the office on fire. 🔥

Some forensics on the PYUSD token mint today. Its worse than I thought.

Looks like Paxos tried to transfer 300M PYUSD between wallets, but accidentally burned 300M instead.

So in order to undo their mistake, they tried to remint the 300M they burned back into the original…

– sam ramirez (@sram1337) October 15, 2025

Thankfully, Paxos burned the excess supply within an hour, restored balances, and confirmed no customer funds were harmed. Phew! But the damage to their reputation? That’s gonna need more than a band-aid. 🩹

This whole debacle has everyone side-eyeing collateralization mechanisms and manual oversight in the stablecoin industry. 🕵️‍♀️ Chainlink’s Zach Rynes chimed in, saying their Proof of Reserve (PoR) could’ve prevented this PR nightmare. Because, you know, validation is important-unless you’re writing a *Mean Girls* sequel. 📜

“…this is a good example of a situation where Chainlink Proof of Reserve would have prevented this entire PR nightmare. Specifically, asset issuers can integrate Chainlink PoR into the minting function of their token contract as a validation check,” Rynes explained.

Basically, PoR would’ve stopped Paxos from minting more tokens unless there were actual reserves to back them. No more infinite mint attacks! Unless you’re printing memes, then by all means, go wild. 🖨️

This whole saga has sparked a debate: Should real-time proof-of-reserves validation be mandatory for regulated stablecoins? The answer is probably yes, unless you enjoy financial chaos. 🤷‍♀️

Collateral Questions and Conspiracy Theories: The Plot Thickens 🕵️‍♂️

Financial blog Zero Hedge asked the million-dollar question: What was this $300 trillion even collateralized by? 🤔 Others joked about the potential for mischief, like lending those trillions for an hour and making $1.71 billion. 🤑 Business, indeed!

“…what exactly was this $300 trillion in ‘stablecoin’ collateralized by when it was minted, mistakenly or otherwise,” the popular account on X posed.

> mint $300T
> lend them for an hour at a mere 5% APY
> make $1.71B
> burn $300T, whoopsie we were doing a test transaction
> business

– Pix🔎 (@PixOnChain) October 15, 2025

DeFi researchers are now whispering about timing, suggesting this “bug” might’ve coincided with PayPal’s liquidity partnership. 🕰️ Is this just a coincidence, or is someone playing 4D chess with stablecoins? 🧩

“Everyone saw ‘300 trillion PYUSD minted’ and laughed it off as a software error. But timing and pattern matter. This happened within days of PayPal’s liquidity partnership (Spark, $1 B injection) and the public realignment of PYUSD with tokenized Treasuries… The ‘bug’ was the moment the refinery came online. PayPal will re-rate to $100 ASAP,” wrote 941.

Data firm Santiment called it: this event was a big, flashing red light for the stablecoin market. 🚨 With the market cap approaching $310 billion, Paxos’ overmint is a reminder that even regulated issuers can trip over their own feet. 👞

Regulators are now eyeing mandatory PoR integration, real-time checks, and transparent audits. Because if one misplaced zero can mint $300 trillion, maybe it’s time to bring in the adults. 👩‍💼

So, the real question is: are stablecoins’ biggest enemies hackers or their own operators? 🤔 Either way, grab your popcorn-this drama is just getting started. 🍿

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2025-10-16 09:53