If you are an XRP fan, you’ll no doubt be rejoicing over news Coinbase has finally added the cryptocurrency XRP—designed for cross-border payments—to its main exchange. You’ll be less enthused by the trifling issue that if you do so, you might end up losing your XRP. Allow us to explain.

There are three cryptocurrencies, Monero, Stellar and XRP, that use “destination tags.” These are identifying bits of data an exchange uses to make sure funds go to the right user. So, it’s important that you make sure to include the number when sending XRP to Coinbase—or any other exchange for that matter. But, sometimes mistakes happen. And if the tag is wrong, or not entered at all, this means it is harder for Coinbase to know where the money should go. But instead of manually fixing the problem—which other exchanges do—Coinbase claims the XRP is “permanently lost.” XRP fans are not happy.

When it comes to a cryptocurrency transaction, the responsibility for making sure the destination address—the long string of numbers and digits, known as a hash—is correct falls to you. If this is wrong, then your coins can be sent to an address that nobody has access to, which means bye bye crypto. That’s where destination tags come in.

These tags are used by exchanges to work out who has received what money. So, it’s not that the XRP is sent to the wrong address, only that the exchange can’t work out where to assign the cryptocurrency. This is a process that can be solved fairly painlessly. All the user has to do is prove he owns the address where the money was sent from, by making another payment from the same address. This process is used by other exchanges.


On March 2, Bitrue, an exchange, posted on Twitter on March 2 that it manually allocates funds if there is a missing or wrong destination tag. Crypto wallet Wirex and Kraken exchange do so too. Coinbase is choosing not to, and people are peeved.

A developer behind the XRPtipbot—a way for tipping using with XRP on Twitter, Reddit, and Discord—expressed his frustration. Weitse Wind posted, “The XRP most definitely isn't lost, it's in your hot wallet! And you're not "not able" to recover, you simply REFUSE TO. This is misleading.”

Dr. T, a well-known XRP supporter, has started a campaign on Twitter demanding Coinbase change its stance on the supposedly lost funds. Dr. T will no doubt be heartened by the impact the #DeleteCoinbase movement had on the exchange’s decision making. Read our coverage of that here.


Coinbase has lurched from one crisis to another over the last few weeks. From hiring--and then firing--the team behind analytics firm Neutrino, to casually admitting in an interview its former analytics provider was selling customer data. While both stories could be put down to errors in judgment, the exchange’s woeful handling of both issues points to bigger problems inside one of the world’s biggest crypto exchanges.

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