David Schwartz, the chief technology officer at Ripple, has responded to the Cardano founder and IOG CEO Charles Hoskinson’s comments about possible reasons behind the United States regulators’ determination that Ethereum (ETH) is not a security.
During an ‘Ask Me Anything’ session on October 8, Hoskinson (one of the eight former Ethereum founders) voiced his perspective. He pointed out that former SEC director William Hinman clearly stated in 2018 that Ether wasn’t a security. However, the regulatory status of other crypto assets, like XRP, remains an open debate.
He said the Hinman emails and other disclosures shed light on the SEC’s decision-making process, revealing an uneven application of law. Moreover, he emphasized that none of the regulator’s actions implied corruption, only favoritism.
Hoskinson also differentiated between two emerging narratives in the crypto space. One shows that ETH officials have leveraged their financial power or networks to obtain a more lenient stance from the SEC. Meanwhile, some XRP supporters believe Ether could have actively plotted against Ripple and its coin, XRP. Emphasizing the contrast, Hoskinson said these are quite different matters.
He further added:
“It is one thing to use relationships to protect your own thing. It is another thing to use relationships in a conspiracy to attack a competitor.”
In a sharp retort on the social platform X, Ripple’s CTO, David Schwartz, countered:
“I would argue that a government actor showing favoritism aligned with the personal interests of themselves and their friends is corruption.”
This is the first time a Ripple official has directly labeled the “Ethereum Gate” situation as corruption. ETH gate is a conspiracy theory alleging that Ethereum received preferential treatment from US regulators, notably the SEC, even though the SEC has been reiterating its stance that ETH isn’t a security for many years.
Ethereum Gate Divides The Crypto Community
It’s widely documented that William Hinman consulted Ethereum co-founders Vitalik Buterin and Joseph Lubin before his pivotal speech. During this speech, Hinman classified both BTC and ETH as non-securities. His stance opposed the recommendations of other SEC officials.
These disclosures heightened suspicions regarding Hinman’s potential financial incentives, particularly in light of his affiliations with Simpson Thacher, a prominent member of the Enterprise Ethereum Alliance (EEA). Hinman has reportedly accrued more than $15 million from Simpson Thacher while serving at the SEC.