Charles Hoskinson, the founder of Cardano, has ignited a small storm among some members of the crypto community. In a recent live AMA video, Hoskinson railed against the unfair treatment of different crypto tokens by the U.S. Securities and Exchange Commission (SEC), saying that Bitcoin had received unfair and preferential treatment from the regulator.
In a recent SEC complaint targeting Kraken, the regulator designated Cardano’s ADA as a security. Hoskinson wasn’t happy, to say the least.
Now, the Cardano founder is taking fire for alleged hypocrisy. Critics say that Hoskinson backed bad decisions by the SEC when it favored Cardano’s ADA coin, and has failed to make the same defense of XRP, another cryptocurrency. Ripple, the creator of XRP, won a landmark case earlier this year against the SEC, in which its classification of XRP as a security was mostly tossed aside by a judge.
In a response to Hoskinson’s most recent AMA, a “Mr. Huber” account on X, responded with two clips of Hoskinson referring to the XRP community as conspiratorial. At the time, tensions within the XRP community were high amidst the ongoing SEC case.
One of the big accusations leveled at the process was that Joseph Lubin, a co-founder of Ethereum and the founder of ConsenSys, had improperly influenced SEC officials to give Ethereum an edge over the competition.
The SEC has repeatedly refused to designate Ethereum’s coin ETH as a security, when every other coin appeared to be fair game.
The network of theories pointing to potential favoritism with regard to the classification of Ethereum has become known as ETHGate (#ethgate). The saga goes back to when the SEC first designated Ethereum and Bitcoin as non-securities back in 2018. There are widespread allegations that then-Director of Corporate Finance, William Hinman was improperly influenced in that decision, specifically in favor of Ethereum.
Some believe Hoskinson was happy to sit back and watch XRP take the heat, as both ETH and ADA share many similarities, including the fact they are both smart contract platforms.
“I’m sorry, @IOHK_Charles , but for two years you did everything you could to make the #XRPcommunity to look ridiculous and embarrass us in public,” the account posted on . “I know you offered peace, but only to come out of nowhere and call us crazy conspiracy theorist again. No look at you. It’s funny what can happen in a year, isn’t it?”
Mr. Huber also accuses Hoskinson of helping in the “trivialization and cover-up of Joseph Lubin’s corruption.” Steven Nerayoff, a former Ethereum advisor, has also made many similar claims about improper influence.
To add fuel to the fire, a top lawyer for Consensys, congratulated the SEC on its regulatory approach — the same approach that had XRP designated as a security (a judgment that has since mostly been thrown out in court) and ETH getting a free pass. XRP community members were not happy, to put it mildly.
The perception among some is that Charles Hoskinson was happy to denigrate the conspiratorial thinking of XRP members when it seemed ADA might get a free pass, like ETH. Now that ADA has been labeled a security, Hoskinson is all of a sudden up-in-arms, so the critique goes.
Hoskinson refused to take the criticism that he stood idly by and took an anti-XRP stance lying down. He fired back against accusations that Ethereum co-founder Joe Lubin bribed the SEC to go after XRP, demanding evidence. “Again, no matter how many times you tweet, there is zero evidence that has ever been presented that Joe Lubin bribed the SEC to go after XRP,” Hoskinson tweeted.
He differentiated between arguments that Ethereum got a “free pass” from regulators and the unsubstantiated allegations of bribery, saying critics were incapable of making that distinction. Hoskinson called the bribery claims “conspiracies and slander,” saying he has been waiting two years for a single piece of evidence to back them up.
Without such proof, he argued, the claims amount to nothing more than the spreading of falsehoods. Hoskinson expressed bewilderment that detractors persist in making these claims without evidence after all this time. “I don’t get the stupidity of it,” he said.
The Cardano founder had only fired back at allegations surrounding the ETHGate scandal in October – emphasizing the difference between XRP and Ethereum.
However, Ripple’s Chief Technology Officer, David Schwartz, offered an alternative viewpoint. He said that government favoritism in line with personal interests could be considered corruption.
Schwartz dismissed Hoskinson’s view that the scandal was merely an “unequal application” of law rather than corruption. The two seem to agree that the U.S. stance on cryptocurrencies has been inconsistent, hindering adoption.