XRPL Labs Founder Says XRP Wallet Xumm Cannot Rug

XRPL Labs founder Wietse Wind has debunked claims of a potential rug involving Xumm (now Xaman) in an attempt to address a user’s concerns.

An XRP community member raised these concerns on X to draw parallels between the defunct Bitcoin exchange Mt. Gox and Xumm (now Xaman). Recall that Mt. Gox shut down in February 2014 and filed for bankruptcy following a historic hack that led to the loss of thousands of BTC.

The event affected its over 24,000 customers, leading to massive financial losses. In his recent remarks, the anonymous XRP community member asked if Xaman was moving toward the direction of Mt. Gox, raising concerns about a potential rug.

In response, Wietse Wind, founder of XRPL Labs, the developer team behind Xaman, explained why such concerns are unfounded. Notably, Xaman is a non-custodial wallet, not a centralized crypto exchange like Mt. Gox.

Following the collapse of FTX in November 2022 due to a misappropriation of user funds, investors have become more wary of centralized exchanges (CEXs). This trend prompted CEXs to start revealing their proof of reserves (POR) to confirm that they do hold customer assets as is.

The Safety That Comes with Self-Custody

However, self-custodial wallets like Xaman are not obliged to do this, as the assets are not held by the wallet providers but stored directly on the XRP Ledger, protected by the users’ private keys. Notably, the Xaman wallet only serves as a means to manage the assets, it doesn’t custody them.

As a result of this, if any self-custodial wallet such as Xaman implodes, the event would have no effects on customer assets. Users would only need to input their private keys in any other self-custodial wallet and regain access to their assets.

Wind emphasized this in his reply. “Your funds are administered on the XRPL and are not under our custody. You would simply load your secret in another self-custodial client, and you’d be ready to go again,” he confirmed.

Xaman (Xumm) is a self custodial wallet. We can’t rug.

Your funds are administered on the XRPL and are not under our custody. You would simply load your secret in another self custodial client and you’d be ready to go again.

— WietseWind (🛠+🪝 Xumm @ XRPL Labs) (@WietseWind) January 29, 2024

In the wake of the FTX implosion, blockchain enthusiasts charged investors to switch to non-custodial wallets such as Xaman and cold wallets like Ledger. Following the FTX collapse, Ledger recorded one of its best months in November 2022, as users switched to self-custody.

Xaman has also witnessed a surge in activity in recent times. Notably, The Crypto Basic disclosed last March that unique daily active users on the protocol surged 21% to 34,480. The Xaman team has also continued to expand on and off-ramp options for greater seamlessness.

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