Ripple’s Chief Technology Officer, David Schwartz, has responded to remarks made by Cardano’s founder, Charles Hoskinson, regarding the possible reasons behind the United States regulators’ conclusion that Ether (ETH) is not a security.
In an AMA session on October 8, Hoskinson discussed the widely debated ETHgate theory, asserting that the government’s actions were not driven by corruption. The ETHgate theory is a conspiracy theory suggesting that Ethereum received preferential treatment from U.S. regulators, particularly the U.S. Securities and Exchange Commission (SEC), which has consistently maintained that ETH is not a security for several years.
While SEC Director William Hinman stated in 2018 that Ether is not a security, U.S. regulators have faced challenges in determining the status of other cryptocurrencies, including XRP, causing significant obstacles to their adoption.
Hoskinson argued that the release of Hinman’s speech drafts on the regulatory status of Ethereum in June 2023 does not indicate corruption but rather favoritism. He emphasized that there is no concrete evidence to support anything beyond favoritism by the SEC. Hoskinson questioned the absence of evidence such as emails and meetings and raised concerns about the potential dilution of Ethereum’s goal of not being classified as a security, considering that XRP serves different customers and lacks smart contracts, operating with an entirely different business model.
Hoskinson’s recent remarks related to ETHgate prompted a swift response from the XRP community, particularly figures like XRP CTO Schwartz. The XRP community, in particular, clashed with Hoskinson over the definition of corruption. Schwartz, on October 12, contended by saying that he would argue that a government actor showing favoritism aligned with the personal interests of themselves and their friends is corruption.
Some community members observed that Hoskinson’s questions regarding evidence related to ETHgate might be linked to allegations that he had undisclosed information about his early days in Ethereum. In addition to his role at Cardano, Hoskinson is one of the eight co-founders of Ethereum, alongside Vitalik Buterin, and briefly held the position of Ethereum’s CEO between 2013 and 2014. Following a public dispute among the co-founders, Hoskinson departed Ethereum in 2014 to subsequently launch Cardano.
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