A Cardano wallet that had been inactive for five years mistakenly lost about 90% of its holdings after swapping a pool with low trading activity for a stablecoin.
ZachXBT, a blockchain investigator, made this mistake public after reporting it on Sunday, November 16. The investigator observed 14.4 million Cardano (ADA) tokens, worth $6.9 million, being swapped for 847,695 US dollar Anzens (USDA) stablecoins.
This event resulted in a loss of over $6 million in Cardano (ADA).
A Cardano investor’s move creates tension in the blockchain ecosystem
Reports from ZachXBT indicated that the Cardano user, identified by the wallet address “addr…4×534,” appeared to have conducted a test transaction of 4,437 ADA for a US dollar stablecoin labeled USDA at approximately 4:06 PM UTC on Sunday. This occurred 33 seconds before the substantial USDA swap. Interestingly, sources noted that the Cardano wallet had remained inactive since September 13, 2020, prior to the mistake occurring.
This out-of-the-ordinary transaction has drawn attention to crypto investors about the importance of using liquid crypto pools when carrying out swaps, particularly with substantial orders that can significantly impact pricing, to avoid poor execution rates.
Meanwhile, recent data from CoinGecko indicated that this transaction appeared to increase ANZA’s price to approximately $1.26 before it declined back to $1.04.
Still, it is unclear whether the Cardano user intentionally planned to purchase this lesser-known stablecoin, which has a market cap of $10.6 million. On the other hand, Blockchain records attempted to address these concerns, indicating that this crypto investor did not have a record of owning USDA stablecoins before this incident.
Several analysts weighed in on the situation. According to them, crypto-related mistakes such as this scenario can significantly impact the markets. The analysts also noted that this is not the first time such an error has occurred this year.
They cited the incident in October, in which Paxos, a regulated blockchain infrastructure firm that issues stablecoins, accidentally created 300 trillion PayPal USD (PYUSD) and subsequently burned them approximately 22 minutes later, confusing many crypto users.
Paxos mistakenly mints and burns 300 trillion PayPal USD
Regarding the October incident, Omer Goldberg, the founder of Chaos Labs, shared an X post stating that Aave would temporarily stop trades for PayPal USD. Sources with knowledge of the situation noted that this act, which involved both the minting and burning of the stablecoin, was a significant event and occurred unexpectedly.
The scenario was made public after data from the Ethereum blockchain showed that Paxos minted around 300 trillion US dollar-pegged stablecoin at 7:12 pm UTC. Afterwards, the company burned the total amount by transferring it to an inaccessible wallet. This incident took place 22 minutes after the minting process.
The error briefly caused concerns across the digital asset space as some community members called it one of the most visible fat-finger moments in blockchain history.
To explain the situation, Paxos decided to share an X post highlighting that they had unintentionally minted excess PYUSD during an internal transfer. The company described the occasion as an internal technical mistake. “There has been no security breach. Customer funds are secure, and we have fixed the issue,” Paxos added.
After this news, although PYUSD maintained its value tied to the dollar, its price slipped slightly by around 0.5%, according to data from Nansen. Data from the International Monetary Fund, however, noted that the $300 trillion minted represents an amount that is more than twice the global GDP and more than 125 times the number of U.S. dollars in circulation.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.
