Ripple CTO David Schwartz engaged in a heated conversation with an X user about the pros and cons of XRPL’s proposed clawback feature.
Schwartz mentioned that issuers have legal avenues to pursue recovered funds under current rules.
He noted that users’ assets are often held in third-party custody, similar to bank accounts, making it a common practice.
A recent Twitter debate highlighted divided opinions on Ripple‘s XRP Ledger (XRPL) proposing a new clawback feature. The conversation between Ripple CTO David Schwartz and user Becky’s Robot Dreams about the proposed feature’s pros and cons became heated.
@JoelKatz would rather have an #XRPL user pay exorbitant legal fees to recover stolen funds from an issuer clawing back their assets than simply not implementing a Clawback function in the first place. This is an opinion brought to you by a man who just spent millions having… https://t.co/r1dWCqgL0O
— Becky's Robot Dreams 🤗💞🤖🟪🐸 (@grandorganics) October 4, 2023
When asked about implementing the clawback feature, Schwartz noted issuers could legally pursue recovered funds in various ways under current rules. He stated users’ assets are often already in third-party custody, like with bank accounts, so this is not unusual.
Schwartz said,
A private party could bring a legal action against the issuer because the issuer has custody.
In response, Becky claimed Schwartz would rather XRPL users pay “exorbitant legal fees” to get assets back than not have clawback at all. She referenced Ripple spending millions battling a lawsuit against the government.
Becky said,
This is an opinion brought to you by a man who just spent millions having Lenny Kravitz play at a party after spending millions more dollars to fight a lawsuit against the government.
Schwartz rebutted that freeze features already exist, so clawback does not necessarily disadvantage users. He argued Becky’s objection was irrational since users could face equal or worse outcomes without clawback.
The debate highlighted diverging perspectives on restricting XRPL transactions. Schwartz focused on legal practicalities and freeze features. But Becky objected based on principle and costs to users.
The confrontation showed clawback features remain a contentious issue within crypto. Schwartz tried to present the case for the proposed feature but faced backlash for allegedly undermining decentralization principles core to the ethos of cryptocurrency.
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