Cryptocurrency exchange Poloniex has reported the deletion of XRP Ledger accounts.
The exchange deleted more than 85,000 XRP Ledger addresses in four days, recovered approximately 1.55 million XRP tokens from inactive or abandoned accounts, and burned more than 171,000 XRP tokens.
The XRP Ledger is a decentralized, open-source blockchain protocol that facilitates fast and cheap transactions.
However, the process has raised questions in the cryptocurrency community about the underlying reasons and possible consequences of the decision.
Cripto Eri (@sentosumosaba) is one of those concerned. According to her Twitter post, Poloniex moved its backup XRP tokens from the 2017 wallet to the new one it created on June 15. Eri wanted to know if Poloniex had the legal backing to enforce this action.
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It's important to note that until recently, Poloniex used the old XRP reserve deposit model, where addresses on the XRP ledger had a reserve deposit of 20 XRP for each initial deposit transaction, according to The Crypto Basic. This means that the first 20 XRP deposited to a new address are held in reserve at that address and are not accessible.
David Schwartz, Ripple's CTO, said that Ripple has repeatedly asked Poloniex to switch to a destination tagging approach (the new system), but they have not received a response.
Recently, however, the cryptocurrency exchange switched to the destination tag model and began the process of removing old addresses.
In doing so, each address deletion requires the burning of a commission of 2 XRP. As a result, the amount refunded after each account deletion ranges from 17.55 XRP to 18 XRP.
Thomas Silkjær, Head of Analytics and Compliance at the XRPL Foundation, said the mass account deletions led to the largest spike in deletions seen at XRPL to date, but the question is whether the exchange will return those XRP tokens to its clients, given that Poloniex did not pay for the reserved XRP tokens but instead charged its users to create an account for new wallets.
