According to CryptoPotato, the XRP Ledger Version 1.12.0 introduces a controversial feature called XLS-39 Clawback, which allows asset issuers to 'claw back' assets for account recovery or in case of suspected fraudulent activity. This optional feature has sparked debate within the XRP community, with concerns about it granting issuers excessive control and potential for misuse.

Ripple's development team proposed the Clawback feature in early September, alongside other updates such as an Automated Market Maker. The Clawback feature can be used for asset recovery, allowing issuers to re-assign tokens to an alternate wallet if a token holder loses access to their account. It can also be used to combat fraudulent activity, enabling issuers to reclaim funds from token holders if they suspect any wrongdoing.

The Clawback feature is turned off by default and can only be activated for issued tokens other than XRP. However, some members of the XRP community argue that this feature gives token issuers too much control over token holders and could be exploited.