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Ripple’s chief technology officer David Schwartz has responded to the comments made by the Cardano founder regarding the potential motivations behind the determination by U.S. regulators that Ether (ETH) is not classified as a security.
Charles Hoskinson, the founder of Cardano, discussed the widely debated ETHgate theory during an AMA session on October 8, asserting that the government’s actions were not indicative of corruption.
ETHgate is a conspiracy theory suggesting that Ethereum has received leniency from U.S. regulators, especially the U.S. Securities and Exchange Commission (SEC), which has consistently maintained that ETH is not a security for several years.
Even though SEC director William Hinman characterized Ether as not being a security in 2018, U.S. regulators have faced challenges in determining the status of other cryptocurrencies, including XRP (XRP), which has led to considerable obstacles to their adoption.
According to Hoskinson, the drafts of Hinman’s speeches regarding Ethereum’s regulatory status—released in June 2023—do not indicate corruption but rather favoritism.
“None of that activity presupposes corruption, just favoritism,” Hoskinson stated during the AMA, adding that “this is how the internet works, and it can’t be fixed now.”
The Cardano founder highlighted that there is no evidence supporting anything beyond favoritism by the SEC. “What evidence do you have of that? Where are the emails? Where are the meetings?” Hoskinson inquired. He also contended that XRP caters to different customers, lacks smart contracts, and operates under a completely different business model. He further stated:
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“Doesn’t that dilute your entire goal of making Ethereum not a security to also do that? Are you so scared of XRP that’s going to happen? You really believe that? If you do, you’re a crazy person in my book.”
Hoskinson’s recent comments related to ETHgate have swiftly elicited reactions from the XRP community, particularly from figures like XRP’s chief technology officer Schwartz. The XRP community specifically engaged with Hoskinson over the interpretation of corruption.
“I would argue that a government actor showing favoritism aligned with the personal interests of themselves and their friends is corruption,” Schwartz expressed on X (formerly Twitter) on October 12.
“So saying the word ‘corruption’ in a more polite way is ‘favoritism’,” one commenter remarked on X.
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Some members of the community also suggested that Hoskinson’s inquiries regarding ETHgate evidence might stem from the notion that he allegedly has much to conceal about his early involvement with Ethereum.
In addition to his position at Cardano, Hoskinson is one of the eight co-founders of Ethereum alongside Vitalik Buterin and briefly served as Ethereum’s CEO from 2013 to 2014. Following a public disagreement among the co-founders, Hoskinson departed from Ethereum in 2014 to later establish Cardano.
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