XRP Fraud Scandal: 1 Trillion Fake Tokens Exposed

• A supposed US Treasury XRPL wallet was exposed as a fraudulent scheme.
• Fraudsters used fake tokens and misleading domains to manipulate trustlines.
• Regulatory optimism contrasts with the need for cautious verification in crypto

Recent claims suggest the US Treasury has created a wallet on the XRP Ledger (XRPL). However, deeper investigation reveals a concerning twist involving fake tokens and elaborate schemes.

According to XRPL explorer Bithomp, the wallet in question was activated on January 21, 2025, at 3:17 UTC. The address quickly set its domain to home.treasury.gov, the official website of the US Treasury. Following activation, the wallet created trustlines for tokens named after Bank of America, BlackRock, and JPMorgan. Each token issuance reached a staggering 1 trillion units.

However, these tokens were fraudulent, issued as part of an intricate ploy. The wallet placed large trade orders, including one involving 299 million JPMorgan tokens traded for 33.23 million Ripple tokens. This gave an exchange rate of 0.11 XRP per token. Such activities raised suspicions among community members.

The Ripple community quickly flagged the anomalies. DROPoholic, an XRPL-focused account, was among the first to highlight the wallet’s interactions with a fake Bank of America account. Adding to the confusion, XRPScan data revealed the wallet had been verified by Xumm (formerly Xaman), a popular XRPL wallet service.

Wietse Wind, founder of Xumm, addressed these concerns, explaining that blockchain data is public and editable. While the KYC process verifies an individual’s identity, it doesn’t confirm their association with a specific entity. Wind’s investigation found that the wallets were created by individuals in the Philippines, all KYC-compliant but not linked to legitimate organizations.

Wind emphasized that anyone can modify a wallet’s domain or create misleading tokens, urging users to wait for official confirmations. This issue is not new. Last year, an account falsely linked to Elon Musk appeared within the Ripple ecosystem, highlighting the need for vigilance.

XRP Regulatory Shifts and Industry Speculation

This incident coincides with broader discussions about cryptocurrency regulations in the US. Following President Donald Trump’s inauguration, there’s renewed optimism about regulatory clarity. Circle CEO Jeremy Allaire suggested the President might enable banks to trade and offer cryptocurrencies. Similarly, Brian Moynihan, CEO of Bank of America, indicated traditional banks are open to crypto adoption pending regulatory approval.

Despite these developments, the fake wallet’s activities underline the importance of verifying sources. While KYC ensures identity legitimacy, it doesn’t guarantee organizational credibility.