Leaders in the cryptocurrency industry have started a verbal battle over the SEC’s contentious claim that Ethereum is not a security. The founder of Cardano, Charles Hoskinson, was recently criticized by Ripple CTO David Schwartz for defending the SEC’s alleged favoritism.
The argument is based on recently discovered SEC documents that claim director William Hinman gave Ethereum special treatment in 2018 by declaring it not to be a security.
As the SEC pursued lawsuits against Ripple and other altcoins, this gave rise to “ETHgate” accusations. Hoskinson claimed there is no evidence of corruption, only possible favoritism, in an AMA last week. He requested documentation of any meetings or emails that revealed improper behavior between authorities and Ethereum.
In response, Schwartz compared favoritism that benefits friends to corruption. He didn’t buy into Hoskinson’s reasoning for the inconsistent regulatory measures. According to a tweet from Schwartz, corruption occurs when a government official shows favoritism that is in line with personal interests. Investors in XRP backed the Ripple CTO, who claimed Ethereum was given preferential treatment.
Before departing to start Cardano in 2014, Hoskinson assisted in founding Ethereum and served for a brief while as CEO. According to certain conspiracies, he intends to conceal SEC matters in order to defend Ethereum.
Hoskinson asserts that the SEC’s diverse approach is justified by the various business models in use. According to him, Ethereum enables smart contracts whereas Ripple serves banks, posing less of a security concern.
The argumentative conversation highlights the concerns in the cryptocurrency community about perceived SEC overreach. A common perception is that regulators ignore Ethereum’s similarities in favor of choosing simpler targets like XRP.
Regarding XRP sales that the SEC claims are unlawful securities offers, Ripple is in judicial battle with the agency. The case might clarify the law on what cryptocurrency securities are.
According to Hoskinson, given the disparities between the leading cryptocurrencies, the SEC acted fairly. Schwartz and other critics disagree, arguing that the contradiction raises the possibility of unjustified discrimination.
The SEC’s ambiguous standards are under scrutiny, and the sector is hoping that courts will soon provide clear direction. The disagreement over the agency’s activities continues to grow among crypto leaders until then.
The most recent social media argument between Hoskinson and Schwartz reveals the divisions among the crypto community regarding cooperating with regulators. More information concerning the SEC’s thinking may still surface as litigation move forward.
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