Cardano (ADA) is currently being tagged as a security by the United States Securities and Exchange Commission (SEC) in its latest lawsuit against Binance and its CEO, Changpeng Zhao (CZ). This development has garnered significant attention, particularly among pro-XRP lawyers and the broader cryptocurrency community.
What the SEC Says Against Cardano (ADA) in the Lawsuit
According to the regulatory agency, between 2015 and 2017, IOHK, the company behind Cardano, sold ADA as an unregistered security, raising an impressive $62 million. The SEC argues further that an investment contract exists between ADA holders and the three entities responsible for Cardano, including Input Output Hong Kong (IOHK), the Cardano Foundation, and Emurgo.
The SEC accused Binance of facilitating the trading of “unregistered securities,” listing popular tokens such as BNB, BUSD, SOL, FIL, and, surprisingly, ADA.
The inclusion of Cardano (ADA) in this list captured the interest of Bill Morgan, an Australian-based lawyer known for supporting XRP.
Speaking of the presence of Cardano on this list, the Australian lawyer said, “Couple of new ones in that bunch. Cardano finally takes one for the team. Sorry Charles Hoskinson. It’s a regulatory conspiracy. And ALGO again. At least the Ethereum free pass continues.“
Couple of new ones in that bunch. Cardano finally takes one for the team. Sorry @IOHK_Charles
It’s a regulatory conspiracy. And #ALGO again. At least the #Ethereum free pass continues. https://t.co/GMuet2rsTu
— bill morgan (@Belisarius2020) June 5, 2023
Charles Hoskinson’s Reaction to SEC’s Claims
Inspired by Cardano’s founder, Charles Hoskinson, Morgan wryly referred to this turn of events as a regulatory conspiracy. He also pointed out the SEC’s repeated classification of Algorand (ALGO) as security while questioning why Ethereum seems to have evaded similar scrutiny.
It is important to note that despite criticism from members of the XRP community, last October, Hoskinson had dismissed the notion of collaboration between the SEC and Ethereum insiders in their targeting of Ripple and XRP alone, tagging it a “grand conspiracy.”
Amid the intense controversy, the founder of Cardano conveyed his disappointment with David Schwartz, Ripple’s Chief Technology Officer (CTO), regarding his handling of the situation. The founder urged Schwartz to address the XRP community and discourage them from embracing conspiratorial thinking.
While the controversial nature of SEC’s recent statements regarding Cardano cannot be denied, it is essential to note that no charges have been filed against Hoskinson or IOHK yet. Previously, however, there were calls from various segments of the crypto community to support XRP against what they perceive as the SEC overstepping its bounds.
Impact of SEC’s Claims on the crypto space
The recent happenings between SEC and Binance about ADA have validated what January Walker, a US Congressional candidate, said last December. “What happens to one will happen to all,” Walker disclosed last December.
The crypto community needs to rally behind XRP Ripple against the SEC. What happens to one will happen to all with government overreach.
— January Walker (@UtahPolitician) December 13, 2022
Today, just a few months after these remarks, Gary Gensler, SEC Chairperson, has asserted that all crypto assets besides Bitcoin are securities. It is still being determined which crypto asset would become SEC’s next target.