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Fake Ripple USD Stablecoin Emerges, Scammers Targeting Unwary XRPL Users

Last Updated June 18, 2024 2:19 PM
Giuseppe Ciccomascolo
Last Updated June 18, 2024 2:19 PM

Key Takeaways

  • Scammers are creating fake Ripple USD (RLUSD) tokens on the XRP Ledger (XRPL) to trick users.
  • The official RLUSD launch hasn’t happened yet and is expected later in 2024.
  • Users should exercise extra care and follow tips to avoid falling victim to scams.

Cryptocurrency fans eagerly await the launch of Ripple‘s official stablecoin, RLUSD. However, scammers have tried to cash in on the hype by creating and circulating a fake version – Ripple USD (RLUSD) – on the XRP Ledger (XRPL).

This phony token aims to trick users into believing it’s the real deal. However, the Ripple community warned users and traders that the official RLUSD launch hasn’t happened yet, as Ripple expects it later in 2024.

Fake Stablecoin Scammers Target XRP Users

Some reports  have mistakenly claimed that 1 billion RLUSD tokens exist on the XRP Ledger (XRPL), based on data from blockchain explorers . However, this was not true. An XRPL account shows a flurry of recent transactions, mostly from the past two days. These falsified transactions involve setting up trust lines for large amounts of a fake RLUSD token.

Users and traders have received some tips on how to avoid being scammed by Krippenreiter , a renowned member of the XRP community.

First of all, it’s important to check the issuer’s history. Users can utilize an XRPL explorer to examine the “r-address” of the issuer, look for a history linked back to established Ripple accounts. Furthermore, only trust announcements about RLUSD directly from Ripple’s website or RippleX must be trusted.

Another suggestion is to follow best practices. Real RLUSD will comply with established XRPL standards, like secure wallet management, and users can find details on xrpl.org. They should also look for trust lines, as genuine RLUSD issuers will likely utilize “Require Auth” settings for authorized trust lines, adhering to regulations. Last but not least, they’d look for multi-signature security: a legitimate issuer will likely employ a multi-signature setup for enhanced security.

Industry leaders like Wietse Wind from XRPL Labs and Vet, an XRP Ledger dUNL operator, also urged caution. They’ve seen users tricked by fake RLUSD on decentralized exchanges (DEXs) and Automated Market Makers (AMMs).

Ripple Plans To Issue A Stablecoin

Ripple is working on a stablecoin. Ripple’s President, Monica Long, hinted  at the possible release of a company-backed stablecoin later this year during the XRP Las Vegas conference. While specific details remain under wraps, the crypto community is buzzing about a potential year-end launch.

Long highlighted the growing importance of stablecoins in the volatile cryptocurrency market, praising their stability and role in facilitating secure transactions. This announcement follows CTO David Schwartz’s updates on upcoming XRP Ledger integrations, including AMMs, lending protocols, and the stablecoin itself.

The proposed stablecoin will be pegged 1:1 to US dollars through a combination of deposits, government bonds, and other low-risk investments. It will offer a potential alternative to existing options like Tether and Circle.

News of the stablecoin’s development has been met with enthusiasm from the XRP community as it promises to expand use cases, improve liquidity, and create new opportunities for developers and users.

An ETF Is The Following Step

While Ripple focuses on its upcoming stablecoin, the market is already buzzing about the next big thing: a potential XRP exchange-traded fund (ETF). With recent approvals for Bitcoin and Ethereum ETFs in the US, speculation is high that either Solana or Ripple could be next.

Ripple CEO Brad Garlinghouse recently added fuel to the fire. He believes a multi-crypto ETF is “inevitable” and predicts similar offerings for other cryptocurrencies. He’s optimistic about the market reaching a $5 trillion valuation, fueled by these ETF approvals.

However, Garlinghouse emphasized the potential for a diverse range of successful projects in the crypto space, each with unique roles in decentralized finance.

It’s important to consider that Ripple remains locked in a legal battle with the US Securities and Exchange Commission (SEC). This case could have a direct impact on both the stablecoin launch and any future ETF approval for Ripple.

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