Coinbase, one of the biggest cryptocurrency exchanges in the United States, was under a microscope due to negative news surrounding its operations. The exchange received a lot of attention because of the addition of XRP on the platform, which resulted in the XRP community rejoicing, and other communities frowning. This was followed by a controversy surrounding insider trading and Neutrino acquisition, leading to the crypto-community starting a #DeleteCoinbase movement.
However, the exchange’s tryst with the XRP community hasn’t come to an end as the exchange fell prey to the community’s wrath. This time, the controversy surrounding the exchange did not pertain to insider trading, but was related to something much more significant.
Based on several social media posts, users sending XRP to the platform were losing their funds, leading to a massive uproar in the community.
The issue was associated with something known as the Destination Tag Technology, a technology that is not being utilized by all cryptocurrencies in the space. Popular coins using this technology include Monero [XMR], a leading privacy coin, Stellar [XLM], and XRP.
According to a Medium blog post by Atomic Wallet, 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, “a short complimentary code piece that assigns your transactions to a certain account.” If the tag input is incorrect, the token is likely to be sent to another user with that particular tag or to the exchange storage.
The wallets can either be a desktop wallet or a hardware wallet, where users have complete control over their public and private keys. 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.
The exchange had clearly mentioned this during the announcement of the listing, even creating a separate page on Destination Tag.
For better understanding, here is a screenshot of the Binance’s XRP transaction page, the largest cryptocurrency exchange in terms of trading volume.
Nevertheless, in reality, these tokens are not “lost;” the exchange needs to verify the transaction and the user to send back the cryptocurrencies. Coinbase’s initial refusal to do so led to the exchange being criticized again.
Dr. T, a prominent XRP proponent, said,
“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”
The issue was bought up by Patrick Boake on his official Twitter handle, stating that a user of Toast Wallet did not fill in the destination tag. The destination tag is not a mandatory category that has to be filled by users on the wallet, and around six users of the wallets reportedly lost their funds. Apart from this, there were other members of the community who reportedly completed a transaction with a wrong destination tag.
Toast Wallet also released an official statement on the issue, stating that there was an issue with funds that were sent from Toast Wallet to Coinbase. They said,
“We’ll be releasing a new version soon including a fix contributed by
@omarish at @coinbase fixing an issue where blank destination tags were being incorrectly set to 0 when sending from Toast. (Thank you!) Remember to always specify the destination tag when sending to exchanges!”
Nonetheless, the exchange is addressing the problem, asking users who lost funds due to ‘incorrect’ Destination Tags, to contact them.
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XRP/Ripple: R3’s Corda to further partnership with credit-union centric CULedger
The XRP community has added yet another accolade to its growing repertoire, with the inclusion of CULedger on R3’s Corda network. This partnership is a bid to expand the credit-union centric firm’s cross-border payment options.
A press release published on May 21 stated that the R3 Corda platform will greatly improve the payments realm for credit unions and financial cooperatives. The press release added that Corda will act as a foundation for CU Pay, the firm’s electronic funds transfer [EFT] product.
CULedger aims to leverage this partnership with R3 to help its credit unions better deal with the risks pertaining to cybersecurity, fraud, and malfeasance. In addition to this safeguarding, the association will boost “member experience, streamline internal processes and reduce administrative and operational costs.”
In lieu of this partnership, Corda Settler, the open-source Cor-DApp centered around the settlement of Corda transactions, will be integrated with CULedger and CU Pay. The press release adds,
“This will allow credit unions using CULedger’s network to choose from a variety of near-instant, secure and affordable domestic and cross-border payment options to meet theirs and their members’ needs.”
CULedger and R3’s relationship began in 2018 and now, the firm aims to further the same with the objective of CU Pay, which is pegged to launch in early 2020 and will be available for credit unions on their network.
David E. Rutter, CEO of R3 stated,
“Corda’s unique approach to privacy and security will support CULedger’s efforts to develop ground-breaking blockchain-based applications for self-sovereign digital identity and fraud detection. We look forward to working with them to create significant efficiencies for credit unions and their members.”
Adoption is reigning high for Corda, with several partnerships making the news. As per their official website, Corda has now partnered with almost 250+ organizations worldwide, and some of these partnerships include companies like Amazon Web Services [AWS], Citibank, HSBC, Huawei, Infosys, Capgemini, and Intel.
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