Bitcoin user incurs record $3.1M fee, Montenegro approves Do Kwon’s extradition, and Grayscale's ETF shift may lead to $2.7B outflow.
Bitcoin User Pays $3.1M Fee for 139 BTC Transfer

Bitcoin User Pays $3.1M Fee for 139 BTC Transfer

Nov 25, 2023
| Issue

Welcome to this week’s closing edition of Datawallet Daily. As usual, we’ve combed through various news sources to bring you the top stories from the last 24 hours:

Bitcoin User Pays $3.1M Fee for 139 BTC Transfer

On November 23, a Bitcoin transaction resulted in a user mistakenly paying a hefty $3.1 million in transaction fees for moving 139.42 BTC, setting a record for the largest fee in Bitcoin’s 14-year history. 

The sender attempted to transfer the amount to another wallet but ended up paying more than half of the transaction’s value as fees. This incident could be attributed to a misunderstanding of the replace-by-fee (RBF) feature, which allows higher-fee transactions to replace unconfirmed ones in the mempool.

In a previous case, a Bitcoin exchange accidentally sent a $500,000 fee for a $2,000 BTC transfer, which was later returned by the miner. However, it remains to be seen if Antpool, the mining pool that captured this latest excessive fee, will return the funds, as this depends on their payout policies.

Montenegro Court Approves Do Kwon’s Extradition

A Montenegrin court has approved the extradition of Do Kwon, Terraform Labs co-founder, to either South Korea or the United States. This development follows a ruling sentencing Kwon to four months in jail for using a forged passport. The final decision on his extradition destination now lies with Montenegro’s Minister of Justice.

Kwon, arrested in March 2023 in Montenegro, is a central figure in the $40-billion collapse of the Terra ecosystem in May 2022. Both the U.S. and South Korea have requested his extradition, with potential legal consequences in both nations. In the U.S., Kwon faces a civil lawsuit and criminal charges, while in South Korea, he could face a lengthy jail sentence. Presently, Kwon is detained in Spuž prison near Podgorica, reportedly in challenging conditions.

Leading Bitcoin Lightning Wallet Exits US Market

Wallet of Satoshi, a prominent Bitcoin Lightning wallet provider, has removed its application from the U.S. Apple and Google app stores, discontinuing service to American customers. The specific reasons behind this decision were not disclosed, but the company reassured U.S. users that their funds remain accessible for withdrawal and transfer to other services. 

Speculation suggests regulatory challenges in the U.S. crypto space may have influenced this move, particularly considering recent legal actions against other crypto entities. Wallet of Satoshi, known for processing significant Lightning Network payments, has expressed hope of resuming operations in the U.S. in the future. The firm’s withdrawal coincides with an increase in the Lightning Network’s capacity.

Grayscale’s Shift to Bitcoin ETF Could Trigger $2.7B Outflow

JPMorgan has released a research report suggesting that the potential conversion of the Grayscale Bitcoin Trust (GBTC) into an ETF might lead to significant outflows. The report estimates around $2.7 billion could be withdrawn from GBTC, as many shares were purchased at a discount in anticipation of the conversion. This speculated exit of funds could exert downward pressure on Bitcoin prices, especially if a portion of these funds leaves the Bitcoin ecosystem entirely. 

However, the impact might be modest if most funds transition into newly created spot Bitcoin ETFs post-SEC approval. JPMorgan also warned that if GBTC doesn’t significantly reduce its fees after the ETF conversion, even more funds could potentially be withdrawn from the trust.

Other breaking news

Wrapping up

That’s all for today’s edition, folks. Do Kwon, yet another crypto startup founder, possibly facing U.S. courts after Montenegro approved his extradition. In light of recent events, more crypto startups may leave the U.S., as seen with a leading Bitcoin Lightning Wallet’s exit from the market. In other news, a Bitcoin user’s $3.1M fee on a 139 BTC transfer highlights that even big BTC holders can make expensive mistakes. Finally, Grayscale’s GBTC potential shift to a Bitcoin ETF could lead to a significant $2.7B outflow. Thanks for following Datawallet Daily!