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- Cardano founder, Charles Hoskinson has waded into the recent ETHGate controversy.
- He believes there is no evidence of bribery by the ETH founding team.
Charles Hoskinson, the founder of the Cardano (ADA) protocol has attempted to clarify the rumors about Ethereum (ETH) bribing the United States regulator Securities and Exchange Commission (SEC) against the Ripple-owned token XRP. His discussions during a recently held Ask-me-Anything (AMA) session were surrounding the drafts of William Hinman’s controversial speech on cryptocurrency and the ETHGate theory.
For context, ETHGate is a circulating theory that presumes that Ethereum executives lobbied to ensure favorable regulation for the ETH token by establishing relationships with SEC officials. When approached for his thoughts on the theory, Hoskinson highlighted that the activities leading up to Hinman’s speech basically show favoritism and not corruption as is widely suspected.
At the same time, he acknowledged the importance of the document to the multi-year legal struggle between Ripple Labs and the SEC, citing that the draft exposed the thought process of the regulator.
Cardano Founder: Hinman Delivers Speech Against SEC’s Warnings
Sometime in June, Ripple released the emails of the draft which showed that Hinman ignored clear warnings as well as suggestions from top SEC officials not to give the speech. Hinman, who was the director of SEC’s Corporation Finance unit, was cautioned severally about giving the speech, on the basis that it did not consider the factors in the much acclaimed Howey test. Therefore, it was believed to have the potential to lead to greater confusion in the securities ecosystem.
All caution proved abortive as he still went ahead to deliver the speech at the Yahoo Finance All Markets Summit. It is worth noting that Hinman stated that a digital asset would no longer be considered a security if it becomes “sufficiently decentralized.” With this kind of criterion, he indirectly declared that tokens like Bitcoin (BTC) and Ethereum (ETH) are classified as non-securities.
The utterance generated some controversy with many people suspecting that the Hinman speech was inspired by someone on Ethereum’s team. Also, the first email from Hinman had “Ether Speech” as its title. To further underscore these suspicions, it was revealed that Hinman had a meeting with Ethereum co-founder Vitalik Buterin a few days before he made the speech.
While Hinman claimed that the meeting with Buterin was focused on helping him understand the Ethereum network better, netizens believe that he was trying to give Ethereum a free pass. Hence, his decision to ignore the warnings from the SEC right from the beginning.
Hoskinson clarified that the crypto community has been talking about two different things when it comes to the ETHGate theory. First, is the allegation that Ethereum officials bought their way by leveraging connections, relationships, or money to convince insiders at the SEC. Secondly is the fact that XRP community members are claiming that ETH officials bribed the SEC to go after Ripple and XRP.
The Cardano boss noted that there is no evidence to prove the second instance.
