Overview
- At 3:12 p.m. ET on Oct. 15, a Paxos hot wallet minted 300 trillion PYUSD on Ethereum, and the company burned the entire amount about 22 minutes later, resulting in no net supply change.
- Paxos called the event an internal technical error with no security breach and said customer funds were safe, as PYUSD briefly dipped about 0.5% from its $1 peg before stabilizing.
- Aave temporarily froze PYUSD markets as a precaution during the review, with BGD Labs stating the over‑mint appeared to be an operational mistake.
- Security firm analyses, including from Quill Audits, highlighted a permission model that allowed a single externally owned address to mint and burn without caps or multi‑party approvals.
- Following the reversal, Paxos resumed routine issuance with a 300 million PYUSD mint, while industry and policy voices questioned operational safeguards and regulatory oversight.