Discussions about the highly controversial “ETH Gate” theory have been reignited, as Ripple’s Chief Technology Officer, David Schwartz, and Cardano creator, Charles Hoskinson, expressed differing viewpoints.
What is ETH Gate?
The ETH Gate theory centers on allegations that Ethereum, the second-largest cryptocurrency by market capitalization, received preferential treatment from the U.S. Securities and Exchange Commission (SEC) compared to other digital assets, particularly XRP.
There are two primary narratives surrounding this theory. The first suggests that Ethereum officials may have influenced the SEC’s regulatory approach to prioritize ETH as a non-security, granting it a competitive edge.
The second, more controversial narrative, alleges that Ethereum leveraged its supposed connections within the SEC to instigate legal action against Ripple and XRP. This narrative, often promoted by some XRP enthusiasts, has been a point of contention between the XRP community and Hoskinson.
Schwartz Questions Ethereum’s Relationship with SEC, Hoskinson Fires Back
Hoskinson has slammed the XRP community about ETH Gate in the past. In response to Hoskinson’s recent dismissal of the second narrative, Schwartz raised concerns regarding the potential influence of former SEC official William Hinman on the regulator’s stance toward Ethereum.
Hinman’s background includes a previous role as a partner at Simpson Thacher & Bartlett LLP, a member of the Enterprise Ethereum Alliance (EEA). The EEA actively promotes Ethereum for enterprise use cases. Additionally, while at the SEC, Hinman reportedly met with Simpson Thacher staff on multiple occasions, including in 2018, the year preceding his controversial speech declaring ETH not to be a security.
Schwartz highlighted these connections as potential evidence that could have impacted the SEC’s approach to Ripple and XRP, particularly when contrasted with the regulatory treatment these assets received.
Hoskinson countered Schwartz’s arguments, emphasizing his rejection of the conspiracy theory alleging Ethereum bribed the SEC to target Ripple and XRP. He accused Schwartz of inciting a mob with false information and maintained that there was no evidence to support Schwartz’s claims.
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Hoskinson further clarified his position, stating that while he disagrees with the way the SEC has categorized certain cryptocurrencies, he does not endorse the narrative suggesting Ethereum actively sought to harm Ripple.
In 2023, Schwartz publicly challenged Hoskinson’s assertion that Hinman’s speech did not indicate corruption, but favoritism towards Ethereum. However, Hoskinson has his gripes with the XRP community, which would remain for a long time.
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