The controversial “ETH Gate” dispute between Cardano founder Charles Hoskinson and Ripple CTO David Schwartz has heated up, with Schwartz recently expressing his displeasure with Hoskinson.
In a recent tweet, Schwartz expressed displeasure over Hoskinson’s “ridiculous response” to concerns raised by the U.S. Securities and Exchange Commission (SEC) regarding the inconsistent treatment between Ethereum (ETH) and Ripple (XRP).
According to Schwartz, Hoskinson has repeatedly denied that the SEC’s favorable regulatory stance toward Ethereum had an impact on the agency’s strict regulatory stance toward XRP.
Inconsistent treatment between ETH and XRP
To recap, the SEC, through its former director of corporate finance William Hinman, declared in June 2018 that Ethereum is not a security. However, the regulator designated XRP as a security in a lawsuit filed against Ripple in December 2020.
The SEC’s inconsistent regulatory treatment of Ethereum and XRP has given rise to the “ETH Gate” theory.
On the one hand, some critics have suggested that the theory has to do with Ethereum executives building relationships with internal SEC officials to create a favorable regulatory environment for ETH. However, others speculated that Ethereum also asked the SEC to attack XRP and Ripple along the way.
Cardano founder and Ripple CTO at odds
Hoskinson, one of the eight founding members of Ethereum, described the first ETH Gate theory as favoritism rather than corruption. Furthermore, he pointed out that there is no evidence to support the SEC’s allegations that it was bribed to attack Ripple and XRP.
His recent comments on the matter have prompted a reaction from the XRP community, with Schwartz citing Hyman’s association with Ethereum as potential evidence.
These included frequent meetings between Seaman and his former employer, Simpson Thacher & Bartlett, the law firm involved with Ethereum, while he was still SEC director.
It is worth mentioning that Simpson Thatcher and Bartlett paid more than $9 million in profit sharing while Seaman was still with the SEC. These events have heightened the controversy surrounding ETH Gate.
However, Hoskinson still believes that these developments do not prove anything, and he continues to demand evidence that the SEC was bribed to attack XRP.
In response, Schwartz said Hoskinson had gotten the answers he sought but still insisted the SEC’s fair treatment of Ethereum had nothing to do with its harsh action against XRP.
Consensys sues SEC
While the Ripple lawsuit regarding the status of XRP is about to end at the district court stage, Ethereum recently sued the SEC to prevent it from potentially classifying ETH as a security.
The move comes after the SEC issued a fourth subpoena to ConsenSys, indicating that the regulator is actively investigating whether certain Ethereum transactions constitute investment contracts.
In addition to issuing a subpoena to ConsenSys, the SEC also issued similar search warrants to other entities that facilitated ETH-related transactions. As a result, Consensys sued the SEC to prevent ETH from being classified as a security.
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