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HomeCrypto NewsMarketPoloniex Deletes Over 85K XRP Wallets, Opens New Wallet With 1.5M XRP

Poloniex Deletes Over 85K XRP Wallets, Opens New Wallet With 1.5M XRP

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Poloniex is on an account deletion rampage targeted at XRP wallets, with over 85,000 accounts deleted so far as community members raise concerns.

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Poloniex has embarked on an XRP account deletion spree, having deleted over 85,000 XRP Ledger addresses in four days. The recent exercise has affected several XRP community members and resulted in Poloniex taking up a total of 1.55 million XRP from the accounts deleted and a total burn of 171K+ XRP.

Eri, a prominent XRP community influencer, is one of the individuals affected by the move. The well-known YouTuber recently took to Twitter to raise concerns about a specific deletion that affected her funds.

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According to Eri, Poloniex transferred her XRP reserve tokens from a 2017 wallet, sending the assets to a new wallet created on June 15. The exchange had deleted the old account and migrated the reserve assets. Eri sought to know if Poloniex had the legal backing to enforce this action.

The XRPL Reserve Deposit Model

To better understand what’s happening, it is essential to take note of the¬†XRP reserve deposit model. Notably, addresses on the XRP Ledger have a 20 XRP reserve deposit for every first deposit transaction.

This means that the first 20 XRP deposited in a new address will be held as a reserve in the address and will be inaccessible. Users can access subsequent deposits after this.

However, this reserve deposit model is outdated and has since been put aside with the emergence of destination tags. Using destination tags eliminates the need to create new XRP Ledger wallets for each user and takes up a 20 XRP reserve for the new account.

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Poloniex Utilized the Old Model

Nonetheless, Poloniex continued to use the old model, creating new addresses and reserving 20 XRP for each address. An XRP community member called attention to this in 2018, complaining that the exchange charged 20 XRP for providing a wallet.

Ripple CTO, David Schwartz, responded by clarifying that Ripple had asked Poloniex to switch to the destination tag approach on several occasions, but they have not received any response.

The exchange has recently switched to the destination tag model, and, as a result, it has begun deleting these old addresses previously created.

Upon deleting an address, the 20 XRP reserved in the address will be released to be spent. Poloniex created an account on June 14, and they have been sending these recovered XRP tokens to that account.

However, it is important to note that each address deletion demands a 2 XRP fee be burned. Consequently, the amount recovered from each account deletion has ranged from 17.55 XRP to 18 XRP.

Over 85K XRP Accounts Deleted

Thomas Silkjær, Head of Analytics and Compliance at the XRPL Foundation, first called attention to the recent account deletion spree. Silkjær confirmed on June 18 that the deletion was over after four days, resulting in 85,566 accounts being deleted.

According to him, the exchange recovered a whopping 1.55 million XRP which can be found in the new address created for receiving the recovered tokens. In addition, the exercise resulted in the incineration of 171,132 XRP.

The official Twitter account of XRPScan, a prominent XRP Ledger explorer, disclosed that the account deletion spree resulted in the biggest spike of deletions observed on the XRPL to date.

The big question now is, will Poloniex refund these XRP tokens to their customers? Silkjær asked this but has not received a response as of press time. Poloniex did not pay for the XRP tokens reserved but instead charged its users an account creation fee for new wallets.

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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