In debate with Ripple CTO, Charles Hoskinson shared what he thinks could have helped Ripple avoid SEC lawsuit
Charles Hoskinson, co-founder of Ethereum and creator of IOG and Cardano, has found himself involved in a massive debate with Ripple’s chief technology officer on Twitter.
In the course of this debate, Hoskinson shared with David Schwartz and John Deaton why the SEC took Ripple and XRP to court but declared Ethereum and Bitcoin to be nonsecurities before that.
This is where the debate started: Gensler and the SBF Zoom meeting
John Deaton and Charles Hoskinson, founders of CryptoLaw, began a conversation regarding the SEC’s case against Ripple.
Deaton was sharing his thoughts on crypto regulation that has been implemented in other parts of the world, in countries such as Japan and Switzerland but not the U.S. He then shared his suspicions about Gary Gensler meeting with Sam Bankman-Fried of the bankrupt FTX exchange. Deaton was curious why it was SBF whom the SEC chairman chose to meet and not Coinbase CEO Brian Armstrong or Jesse Powell of Kraken — both are U.S.-based platforms.
According to the Fox Business article, the Zoom meeting between Gensler and the SBF took place in late March, more than half a year before the collapse and bankruptcy of FTX.
Anonymous sources close to the matter told Fox Business that Gensler and the former billionaire SBF were discussing the possibility of creating a crypto trading platform fully approved by the SEC.
If true, it was happening as the securities regulator continued its long-running lawsuit against Ripple Labs and sued Coinbase for planning to launch a crypto lending service earlier this year. Threatening Krypto was going to the location.
Here’s why SEC did not touch ETH, per Hoskinson
Charles Hoskinson stepped into the tweet thread when Deaton stated that Hoskinson should have spoken to Gensler before SBF. The Cardano founder responded that he did speak in front of Congress in 2022 already and has “engaged with regulators extensively” overall.
He then refuted the idea that Ethereum co-founder Joe Lubin had bribed the SEC to launch an attack on Ripple. Hoskinson believes that Ethereum, which has been designated as a non-security asset by the SEC along with bitcoin, has “zero material impact on the Ripple litigation.”
He believes that Ethereum got a “regulatory free pass” because by the time the SEC started looking into the matter, a large ecosystem of dApps was already built on ETH and lots of billionaires with political capital were invested in it, as well as many VCs. Besides, Ethereum then ran on proof of work, similarly to Bitcoin.
This could have saved Ripple from the SEC: Cardano founder
Charles Hoskinson believes that if Ripple had built its own dApp ecosystem, the SEC might not have attacked it. This is what he told Deaton and Ripple CTO David Schwartz:
Had you guys followed codius through to its logical conclusion and built a dapp ecosystem, xrp would have gotten a pass. This wasn’t bribery. It’s reality. Regulators pick the path of least resistance.
