Ripple’s CTO, David Schwartz, has responded sharply to Charles Hoskinson’s stance on the Securities and Exchange Commission’s (SEC) remarks regarding Ethereum (ETH) compared to other crypto projects.
Often referred to as ETHgate within the digital asset community, this matter ignited in the wake of the SEC’s legal action against Ripple (XRP). This was further compounded by an intensified regulatory focus on altcoins, hinting that a significant number might be classified as securities under the SEC’s guidelines.
Tensions escalated when a draft of the so-called Hinman documents came to light, in which SEC director William Hinman articulated his reasoning for Ethereum not qualifying as a security.
On October 8, Charles Hoskinson, co-founder of Cardano, addressed the ETHgate conspiracy theories during an AMA session. He argued that there’s no evidence supporting such theories and that the regulatory actions were not rooted in corruption.
Rather than labeling it as corruption, Hoskinson referred to the incidents as instances of favoritism, which subsequently triggered criticism from the broader community.
He commented, “None of that activity implies corruption, merely favoritism… this is the nature of the internet, and it’s beyond rectification at this point.”
Hoskinson continued to elucidate the differences between Ethereum and Ripple’s business models. He highlighted that Ripple primarily targets a different clientele and lacks smart contract functionality.
He further remarked, “By attempting to establish Ethereum as not a security, are you also hoping to do the same for XRP? Are you genuinely apprehensive about XRP’s potential rise? If you truly think so, I’d consider that an irrational belief.”
In conclusion, Hoskinson asserted that proponents of the ETHgate theory have yet to provide concrete evidence. He challenged them, asking for emails or records of purported corrupt interactions between officials.
Schwartz and the community respond
Schwartz took issue with Hoskinson’s perspective, suggesting that government actions showing favoritism for personal benefits can indeed be classified as corruption.
He countered, “In my view, when a government official exhibits favoritism that aligns with their personal gains or those of their associates, it’s essentially corruption.”
Following his remarks, many in the crypto community, particularly the XRP Army, rallied behind Schwartz on the X platform (previously known as Twitter). They echoed his sentiment in the comments, branding the entire saga as “pure corruption.”
There were also whispers and conspiracy theories suggesting that Hoskinson, given his tenure at Ethereum, might have undisclosed matters.
Hoskinson was one of the original eight founders of Ethereum and held the position of CEO for a short period. However, in 2014, after differences with other founding members, he departed from Ethereum and subsequently established Cardano.
Recently, Hoskinson took a swipe at the media, accusing them of being lenient on Sam Bankman-Fried, the beleaguered former CEO of FTX. He pointed out that Bankman-Fried’s supporters were framing the sequence of events leading to the exchange’s downfall as merely an oversight on his part.