The Ripple community and Cardano’s founder have been at odds regarding the interpretation of corruption within the context of the ETHgate scandal. David Schwartz, the Chief Technology Officer at Ripple, has countered the statements made by Cardano’s founder about the potential motives behind the determination by United States regulators that Ether (ETH) is not considered a security.
Charles Hoskinson, the founder of Cardano, addressed the much-debated ETHgate theory during an AMA session on October 8th. He argued that the actions taken by the government were not rooted in corruption. The ETHgate theory alleges 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.
Despite SEC Director William Hinman classifying Ether as not a security in 2018, U.S. regulators have grappled with defining the status of other cryptocurrencies, including XRP, which has posed significant obstacles to their adoption.
Hoskinson, in his AMA session, contended that Hinman’s released speech drafts on the regulatory status of Ethereum in June 2023 do not demonstrate corruption but rather favoritism. He stated, “None of that activity presupposes corruption, just favoritism. This is how the internet operates, and it cannot be rectified at this point.”
The Cardano founder emphasized that there is no concrete evidence to support claims of anything other than favoritism on the part of the SEC. He questioned, “What evidence do you have of that? Where are the emails? Where are the meetings?” Hoskinson also argued that XRP caters to different clientele, lacks smart contracts, and operates under an entirely different business model. He added, “Doesn’t that dilute your primary goal of classifying Ethereum as not a security? Are you truly concerned about XRP to that extent? If you are, in my opinion, you’re quite paranoid.”
Hoskinson’s recent remarks concerning ETHgate swiftly provoked a response from the XRP community, particularly from figures like XRP’s Chief Technology Officer, Schwartz. The XRP community, in particular, clashed with Hoskinson over the interpretation of corruption.
Schwartz expressed his viewpoint on X (formerly Twitter) on October 12th, stating, “I would argue that a government actor displaying favoritism aligned with their personal interests and those of their associates constitutes corruption.”
One commenter on X concurred, suggesting that using the term “corruption” in a more polite manner equates to “favoritism.”
Some members of the community also insinuated that Hoskinson’s inquiries about ETHgate evidence might be linked to his potentially concealed aspects of his early involvement with Ethereum.
Beyond his role at Cardano, Hoskinson is one of the eight co-founders of Ethereum, alongside Vitalik Buterin. He briefly held the position of Ethereum’s CEO between 2013 and 2014. Following a public falling out with his co-founders, Hoskinson departed Ethereum in 2014 to subsequently launch Cardano.
