diff --git a/src/cpp/ripple/OfferCreateTransactor.cpp b/src/cpp/ripple/OfferCreateTransactor.cpp
index 0743b36380..c415522b28 100644
--- a/src/cpp/ripple/OfferCreateTransactor.cpp
+++ b/src/cpp/ripple/OfferCreateTransactor.cpp
@@ -436,6 +436,12 @@ TER OfferCreateTransactor::doApply()
 
 		terResult	= temREDUNDANT;
 	}
+	else if (CURRENCY_BAD == uPaysCurrency || CURRENCY_BAD == uGetsCurrency)
+	{
+		cLog(lsWARNING) << "OfferCreate: Malformed offer: Bad currency.";
+
+		terResult	= temBAD_CURRENCY;
+	}
 	else if (saTakerPays.isNative() != !uPaysIssuerID || saTakerGets.isNative() != !uGetsIssuerID)
 	{
 		cLog(lsWARNING) << "OfferCreate: Malformed offer: bad issuer";
diff --git a/src/cpp/ripple/PaymentTransactor.cpp b/src/cpp/ripple/PaymentTransactor.cpp
index 3a5f12a504..65c4aedf37 100644
--- a/src/cpp/ripple/PaymentTransactor.cpp
+++ b/src/cpp/ripple/PaymentTransactor.cpp
@@ -55,6 +55,12 @@ TER PaymentTransactor::doApply()
 
 		return temBAD_AMOUNT;
 	}
+	else if (CURRENCY_BAD == uSrcCurrency || CURRENCY_BAD == uDstCurrency)
+	{
+		cLog(lsINFO) << "Payment: Malformed transaction: Bad currency.";
+
+		return temBAD_CURRENCY;
+	}
 	else if (mTxnAccountID == uDstAccountID && uSrcCurrency == uDstCurrency && !bPaths)
 	{
 		cLog(lsINFO) << boost::str(boost::format("Payment: Malformed transaction: Redundant transaction: src=%s, dst=%s, src_cur=%s, dst_cur=%s")
diff --git a/src/cpp/ripple/SerializedTypes.h b/src/cpp/ripple/SerializedTypes.h
index 562886bfe0..4025274f3c 100644
--- a/src/cpp/ripple/SerializedTypes.h
+++ b/src/cpp/ripple/SerializedTypes.h
@@ -39,9 +39,10 @@ static inline const uint160& get_u160_zero() { return u160_zero; }
 static inline const uint160& get_u160_one() { return u160_one; }
 
 #define CURRENCY_XRP		get_u160_zero()
-#define CURRENCY_ONE		get_u160_one()	// Used as a place holder
+#define CURRENCY_ONE		get_u160_one()					// Used as a place holder.
+#define CURRENCY_BAD		uint160(0x5852500000000000)		// Do not allow XRP as an IOU currency.
 #define ACCOUNT_XRP			get_u160_zero()
-#define ACCOUNT_ONE			get_u160_one()	// Used as a place holder
+#define ACCOUNT_ONE			get_u160_one()					// Used as a place holder.
 
 DEFINE_INSTANCE(SerializedValue);
 
diff --git a/src/cpp/ripple/TransactionErr.cpp b/src/cpp/ripple/TransactionErr.cpp
index 1709cfc368..d75ff2366a 100644
--- a/src/cpp/ripple/TransactionErr.cpp
+++ b/src/cpp/ripple/TransactionErr.cpp
@@ -33,12 +33,12 @@ bool transResultInfo(TER terCode, std::string& strToken, std::string& strHuman)
 		{	tefBAD_GEN_AUTH,		"tefBAD_GEN_AUTH",			"Not authorized to claim generator."					},
 		{	tefBAD_LEDGER,			"tefBAD_LEDGER",			"Ledger in unexpected state."							},
 		{	tefCLAIMED,				"tefCLAIMED",				"Can not claim a previously claimed account."			},
-		{	tefEXCEPTION,			"tefEXCEPTION",				"Unexpected program state."								},
 		{	tefCREATED,				"tefCREATED",				"Can't add an already created account."					},
+		{	tefEXCEPTION,			"tefEXCEPTION",				"Unexpected program state."								},
 		{	tefGEN_IN_USE,			"tefGEN_IN_USE",			"Generator already in use."								},
+		{	tefINTERNAL,			"tefINTERNAL",				"Internal error."										},
 		{	tefNO_AUTH_REQUIRED,	"tefNO_AUTH_REQUIRED",		"Auth is not required."									},
 		{	tefPAST_SEQ,			"tefPAST_SEQ",				"This sequence number has already past."				},
-		{	tefINTERNAL,			"tefINTERNAL",				"Internal error."										},
 
 		{	telLOCAL_ERROR,			"telLOCAL_ERROR",			"Local failure."										},
 		{	telBAD_DOMAIN,			"telBAD_DOMAIN",			"Domain too long."										},
@@ -51,6 +51,7 @@ bool transResultInfo(TER terCode, std::string& strToken, std::string& strHuman)
 		{	temMALFORMED,			"temMALFORMED",				"Malformed transaction."								},
 		{	temBAD_AMOUNT,			"temBAD_AMOUNT",			"Can only send positive amounts."						},
 		{	temBAD_AUTH_MASTER,		"temBAD_AUTH_MASTER",		"Auth for unclaimed account needs correct master key."	},
+		{	temBAD_CURRENCY,		"temBAD_CURRENCY",			"Malformed: Bad currency."								},
 		{	temBAD_FEE,				"temBAD_FEE",				"Invalid fee, negative or not XRP."						},
 		{	temBAD_EXPIRATION,		"temBAD_EXPIRATION",		"Malformed: Bad expiration."							},
 		{	temBAD_ISSUER,			"temBAD_ISSUER",			"Malformed: Bad issuer."								},
diff --git a/src/cpp/ripple/TransactionErr.h b/src/cpp/ripple/TransactionErr.h
index 186aa3c145..f64943a03c 100644
--- a/src/cpp/ripple/TransactionErr.h
+++ b/src/cpp/ripple/TransactionErr.h
@@ -31,6 +31,7 @@ enum TER	// aka TransactionEngineResult
 	temMALFORMED	= -299,
 	temBAD_AMOUNT,
 	temBAD_AUTH_MASTER,
+	temBAD_CURRENCY,
 	temBAD_FEE,
 	temBAD_EXPIRATION,
 	temBAD_ISSUER,
@@ -79,9 +80,9 @@ enum TER	// aka TransactionEngineResult
 	tefCREATED,
 	tefEXCEPTION,
 	tefGEN_IN_USE,
+	tefINTERNAL,
 	tefNO_AUTH_REQUIRED,	// Can't set auth if auth is not required.
 	tefPAST_SEQ,
-	tefINTERNAL,
 
 	// -99 .. -1: R Retry (sequence too high, no funds for txn fee, originating account non-existent)
 	// Causes:
diff --git a/src/cpp/ripple/TrustSetTransactor.cpp b/src/cpp/ripple/TrustSetTransactor.cpp
index a8f9f7a487..062778815f 100644
--- a/src/cpp/ripple/TrustSetTransactor.cpp
+++ b/src/cpp/ripple/TrustSetTransactor.cpp
@@ -248,9 +248,9 @@ TER TrustSetTransactor::doApply()
 		if (uFlagsIn != uFlagsOut)
 			sleRippleState->setFieldU32(sfFlags, uFlagsOut);
 
-		if (bDefault)
+		if (bDefault || CURRENCY_BAD == uCurrencyID)
 		{
-			// Can delete.
+			// Delete.
 
 			terResult	= mEngine->getNodes().trustDelete(sleRippleState, uLowAccountID, uHighAccountID);
 		}
@@ -285,6 +285,10 @@ TER TrustSetTransactor::doApply()
 		// Another transaction could create the account and then this transaction would succeed.
 		terResult	= tecNO_LINE_INSUF_RESERVE;
 	}
+	else if (CURRENCY_BAD == uCurrencyID)
+	{
+		terResult	= temBAD_CURRENCY;
+	}
 	else
 	{
 		STAmount	saBalance	= STAmount(uCurrencyID, ACCOUNT_ONE);	// Zero balance in currency.