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Paxos’ $300 Trillion Stablecoin Minting Error Draws NYDFS Scrutiny

Paxos’ $300 Trillion Stablecoin Minting Error Draws NYDFS Scrutiny

Author:

Global Cryptocurrency

Published:

2025-10-16 07:58:02

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BTCCSquare news:

Paxos Trust Company faces regulatory scrutiny after a technical glitch led to the accidental creation of $300 trillion in PayPal USD (PYUSD) stablecoins—a sum exceeding global GDP. The New York Department of Financial Services (NYDFS) confirmed it is investigating the incident, which originated from a failed attempt to correct a $300 million transfer error between Paxos-controlled wallets.

Forensic analysis reveals the error compounded when Paxos attempted to remint the erroneously burned $300 million, instead generating 300 trillion PYUSD. The episode echoes Citigroup's $81 trillion miscredit in 2024, but with graver implications for stablecoin oversight. Market observers note the incident exposes systemic vulnerabilities in asset-backed digital currencies during critical settlement processes.

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