Poloniex Deletes 85,566 XRP Wallets, Opens New Wallet With 1.5 Million XRP Recovered: Details

Poloniex has launched a mass account cancellation campaign focused on XRP wallets, deleting over 85,000 XRP Ledger addresses in just four days.

Following the strange account deletion, the exchange built a new wallet to manage the recovered tokens. The move generated questions among affected XRP community members, including prominent YouTuber Eri, over Poloniex’s legal standing to take this action.

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The XRP reserve deposit scheme, as well as the antiquated practice of generating new addresses for each deposit transaction, are at the heart of the problem. Even though the destination tag technique eliminated the need for it, Poloniex continued to use the previous model.

The XRP community’s complaint of Poloniex charging a 20 XRP fee for each wallet established prompted Ripple CTO, David Schwartz, to write to the exchange on many occasions requesting that it switch to the destination tag format. Poloniex, on the other hand, has remained silent.

Since introducing the destination tag scheme, Poloniex has begun removing previously generated addresses, necessitating the burning of 2 XRP with each account cancellation.

According to Thomas Silkjaer, Head of Analytics and Compliance at the XRPL Foundation, the account deletion and recovery process took four days, costing Poloniex 1.55 million XRP and resulting in the greatest burn on the XRP Ledger. Concerns have been raised about whether Poloniex will refund consumers who paid the account creation cost for the wallets.

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No Official Statement Yet

While Poloniex has stated that the move was required owing to outmoded practices, the impact on the affected people of the community has yet to be addressed.

Poloniex has not made any official remarks on whether it intends to reimburse the XRP tokens to its customers, leaving affected users in the dark. The incident emphasizes the importance of cryptocurrency exchanges communicating explicitly with their consumers, particularly when taking big measures that affect their customers’ financial holdings.

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