💬 This week I’m highlighting a conversation around a newly proposed CAP — CAP-0035: Asset Clawback!
The discussion around this functionality started back in March. Here’s the premise:Some regulated asset issuers are interested in the ability to claw back assets unilaterally to comply with various regulations. The Stellar protocol allows revoking (“deauthorizing”) trustlines. However, that doesn’t completely solve the problem. First, the balance remains in the unauthorized trustlines. Second, there’s no way to claw back a partial balance.
This proposal provides the issuer with a means to clawback (and reissue if desired) assets in order to support regulatory requirements. This function can be used to recover assets that have been fraudulently obtained, respond to regulatory actions, and — if required — enable identity-proofed persons to recover an enabled asset in the event of loss of key custody or theft.
This proposal would add a new flag to an asset’s issuing account and introduce a new CLAWBACK operation. The CLAWBACK_ENABLED flag on the issuing account must be set to authorize a CLAWBACK operation submitted by the issuing account. The CLAWBACK operation results in the removal of the specified assets issued from the designated account. The CLAWBACK operation only applies to assets issued by the source account. Assets with CLAWBACK enabled can be easily distinguished from traditional blockchain assets (bearer instruments) so that asset owners are aware of rights.
👉 While still early in the CAP process, we’d love to hear your thoughts! Join the conversation on the mailing list or in the Github pull request.