After Coinbase Listing: XRP Users Were Told Their Funds Permanently Lost
San Francisco-based crypto exchange Coinbase surprised the market on February 25 after announcing the launch of Ripple’s XRP on its full-featured trading platform—Coinbase Pro. The XRP community surely have reason to be jubilant as the coin surged by a whopping 9% to $0.34 on the heels of the launch.
Happiness, however, is often short-lived.
Coinbase has once again come under the spotlight due to negative news about its operations. A number of XRP users have claimed that they were told by Coinbase that their funds were permanently lost when sending XRP tokens to the platform, begetting a massive uproar within the XRP community.
The issue had something to do with the Destination Tag Technology—a technology with the purpose of identifying a transaction recipient. Not all crypto assets are leveraging the technology at the moment. It has been found that three major cryptos are utilizing the Destination Tag, including privacy coin Monero, Stellar and XRP.
According to an earlier report by AMBCrypto, “A majority of exchanges in the space have only one address for XRP transactions, resulting in all users of the exchange having the same XRP address. The only way to distinguish each transaction and identify a specific one is via the Destination Tag.”
“However, for Coinbase Wallet and Coinbase.com, users are required to enter the destination tag, and it has to be correct. If it is wrong or not entered, then users will permanently lose control of the tokens as Coinbase will not be able to recover them,” AMBCrypto added.
These tokens, however, are by no means lost for good.
Coinbase could do something to retrieve the lost funds. As XRP proponent Dr. T put it,
“Of course you can do something! Ask the user to send a small test transaction to the correct destination tag to prove they control the wallet that sent the transaction with error. Then move the balance on your internal database! Simple. Why are you making it so hard ?! Just do it.”
Yet the exchange refused to do so, which deeply outraged XRP users.
Wietse Wind, developer of the XRP Tip Bot, expressed his frustration on Twitter. The #DeleteCoinbase movement has become more powerful on Twitter and elsewhere in the face of Coinbase's ongoing scandals.