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XRP Ledger developers propose four fixes to close restricted token loopholes

XRP Ledger developers propose four fixes to close restricted token loopholes

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The fixCleanup3_5_0 amendment would stop restricted tokens from reaching unapproved accounts, but validators still have to sign off

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XRP Ledger developers want to close a set of loopholes that let restricted tokens end up in accounts that never got the issuer’s blessing.

The fix comes as four code changes bundled into a single network upgrade amendment called fixCleanup3_5_0. It is still a proposal, and it goes nowhere until the network’s trusted validators vote it in.

Nobody appears to have been hurt. The XRPL Foundation describes the work as routine protocol hardening, with no reported user impact and no sign of outside exploitation.

What the four changes actually do

The proposals target three areas of the ledger: trust-line management, automated market maker (AMM) pools, and the consistency of transaction checks across the network.

On the XRP Ledger, holding a token other than XRP runs through a trust line, a kind of standing relationship between an account and the token’s issuer. Issuers can restrict their tokens so only accounts they approve can hold them.

Those side doors allowed certain restricted tokens to move to accounts without explicit issuer approval. Developers traced the gaps to trust-line handling, AMM pool behavior, and transaction checks that did not always apply the same rules everywhere.

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Once the amendment is active, unapproved restricted tokens would lose most of their usefulness. The main thing a holder could do with them is send them back to the issuer. Full functionality would depend on the associated trust line getting approved. Issuers would also keep the ability to approve accounts retroactively, which gives them room to clean up legitimate edge cases instead of stranding balances.

The changes do not touch XRP, the network’s native asset.

How the upgrade would go live

For fixCleanup3_5_0 to activate, it needs support from more than 80% of trusted validators. That support has to hold for two consecutive weeks.

The changes have also not yet been merged into the main XRPL software. So the sequence still runs: finish review, get the code into a release, then win and hold validator support long enough to activate.

The proposal package surfaced in late October 2026, with updates posted the week of October 27, 2026. No activation date is set, and none can be until validators weigh in.

A sequel to an earlier patch

An earlier amendment in August 2025 dealt with a loophole tied to NFT trading. The new package builds on that work, extending the same kind of scrutiny to trust lines, AMMs, and transaction checks.

Hussein “Vet” Zangana, director at the XRPL Foundation, has framed the discussion as an effort to strengthen the protocol’s guarantees rather than respond to immediate user problems.

There is no current evidence that outside parties exploited the unapproved-token paths. Every identifiable balance linked to unapproved tokens traces back either to an issuer or to an account that was previously approved.

What this means for issuers, holders, and the network

The most direct stakeholders are token issuers who rely on restrictions. These are typically projects that need to control who holds their assets, often for compliance reasons. Closing those paths makes the issuer’s controls behave the way issuers presumably assumed they already did.

For holders of restricted tokens, the practical change is that issuer approval would matter more. An account sitting on unapproved restricted tokens could find them limited mostly to a return trip to the issuer. Given that existing unapproved balances trace to issuers or prior approvals, the pool of affected accounts looks narrow, and retroactive approval offers a release valve.

For now, the items to track are straightforward. Watch for the code to land in the main XRPL software, then watch validator support climb toward the threshold and hold it for the full two weeks. Until both happen, fixCleanup3_5_0 remains a well-documented to-do list.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.

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