XRP Ledger Fixes Exploit That Could Create and Spend XRP Without Payment

• XRP Ledger patched a flaw that could create XRP beyond its 100 billion supply cap.
• RippleX reproduced the exploit but found no evidence of abuse on public networks.
• Ripple Prime now competes in financing for the $256 billion leveraged ETF market.

XRP Ledger developers patched a flaw that could have allowed attackers to create and spend XRP without funding purchases, threatening its 100 billion token supply cap.

Researchers confirmed the exploit and developers released a fix on September 25, while RippleX said it found no evidence of exploitation on public networks.

Researchers Expose a Flaw Dating to 2015

Researcher Cayden Liao and Veria AI discovered the vulnerability, which reportedly dated back to 2015, and privately reported it on September 22. RippleX engineers reproduced the exploit on a standalone server, confirming that attackers could create XRP without funding it and then spend the newly generated tokens in a subsequent transaction.

The discovery challenged a standard ledger restriction. All 100 billion XRP originated at the network’s launch in 2012, and its software prohibits additional issuance. Developers addressed the vulnerability in xrpld 3.4.1, releasing the server software update without initially revealing what it repaired.

How the Exchange Exploit Worked

The attack targeted the XRP Ledger’s built-in exchange. An attacker could distribute offers across hundreds of accounts, each selling a tiny token amount for an unusually large XRP payment.

A single payment purchasing all those offers would push the combined XRP obligation beyond the software’s counting capacity. Consequently, selling accounts could receive full payment while the buying account paid almost nothing. The ledger’s transaction checks would then rely on the same miscalculated total, missing the newly created XRP. Spreading payments across accounts also avoided a separate limit on individual account receipts.

Ripple Prime Expands Into ETF Financing

Separately, Ripple is expanding its institutional finance business through Ripple Prime, formerly known as Hidden Road, which it acquired for $1.25 billion last year. The prime brokerage agreed to provide brokerage, clearing, and financing services to Brevan Howard.

Sources reported that Ripple is competing in the swap financing market for leveraged ETFs. According to Morningstar Direct, the U.S. market had 593 leveraged ETFs with more than $256 billion in assets, including 426 funds tracking individual stocks. 

Related: XRP Ledger Activates Batch Upgrade to Bundle Eight Transactions Into One