xrpl-dev-portal/docs/concepts/tokens/fungible-tokens/clawing-back-tokens.md

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description Issuers can claw back their tokens for compliance purposes if they enable the Clawback feature before issuing tokens.	Tokens

Clawing Back Tokens

For regulatory purposes, some issuers need the ability to recover tokens after they are distributed to accounts. For example, if an issuer were to discover that tokens were sent to an account sanctioned for illegal activity, the issuer could recover, or claw back, the funds. The ability to claw back funds is controlled differently for different types of tokens:

• Issuers can gain the ability to claw back any of their trust line tokens by enabling the Allow Clawback flag on their issuing account. This flag cannot be enabled if the issuer has already issued trust line tokens. {% amendment-disclaimer name="Clawback" /%}
• MPTs can be clawed back by the issuer if the Can Clawback flag is enabled for the MPT issuance. {% amendment-disclaimer name="MPTokensV1" /%}
• XRP is not a token and cannot be clawed back.

Allow Clawback for Trust Line Tokens

Clawback is disabled by default. To use clawback, you must send an [AccountSet transaction][] to enable the Allow Trust Line Clawback setting. An issuer with any existing tokens cannot enable Clawback. You can only enable Allow Trust Line Clawback if you have a completely empty owner directory, meaning you must do so before you set up any trust lines, offers, escrows, payment channels, checks, or signer lists.

If you attempt to set lsfAllowTrustLineClawback while lsfNoFreeze is set, the transaction returns tecNO_PERMISSION, because clawback cannot be enabled on an account that has already disclaimed the ability to freeze trust lines. Conversely, if you try to set lsfNoFreeze while lsfAllowTrustLineClawback is set, the transaction also returns tecNO_PERMISSION.

Allow Clawback for MPTs

Clawback is disabled by default. To use clawback, the MPT must be configured with the Can Clawback flag enabled. This flag is part of the MPT issuance definition, which is configured before tokens are issued.

Example Clawback Transaction

{
  "TransactionType": "Clawback",
  "Account": "rp6abvbTbjoce8ZDJkT6snvxTZSYMBCC9S",
  "Amount": {
      "currency": "FOO",
      "issuer": "rsA2LpzuawewSBQXkiju3YQTMzW13pAAdW",
      "value": "314.159"
    }
}

If successful, this transaction would claw back at most 314.159 FOO issued by rp6abvbTbjoce8ZDJkT6snvxTZSYMBCC9S and held by rsA2LpzuawewSBQXkiju3YQTMzW13pAAdW.

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