The US Securities and Exchange Commission (SEC) has been cracking down on the Coinbase and Binance exchanges, and the prosecution of prominent cryptocurrencies like Cardano (ADA) has sparked a variety of industry commentary. One of them is if Cardano is capable of validating security and key protocols. Cardanians have exchanged secret codes that show how decentralised the ADA is, refuting the SEC’s claim that the currency is a security.
Cardanians’ argument
The Cardanians’ lengthy tweet compares Bitcoin’s core protocol metrics with those of Cardano and reveals that Cardano is more decentralised than BTC. There are 3,200 pools in the Cardano protocol, with the five biggest holding 8%, 4%, 3%, and 2% of the total shares, respectively.
These low shares suggest that a coalition that may result in a 51% attack on the protocol will require the cooperation of hundreds of individuals. On the other hand, Cardanians pointed out that the Foundry USA pool, which generates around 32% of the blocks, and AntPool, which generates 21%, are among the biggest Bitcoin miners. Shares for the other three pools are 18%, 8%, and 6%, respectively. With these numbers, it is feasible for a small number of pool operators to band together and attack the Bitcoin network.
The fact that Cardano and other cryptocurrencies have a central management team that tries to ensure others profit is one of the justifications cited by the SEC for classifying them as securities. Cardanians claimed in their submission that Gavin Andersen, who later established the Bitcoin Foundation, was given control over the Bitcoin protocol by Satoshi Nakamoto.
Cardanians argued that the management structure of the Bitcoin Foundation is less open than that of Input Output Global (IOG).
IOG debunks SEC’s claims
The SEC’s assertions that ADA is a security have been refuted by IOG and Charles Hoskinson prior to Cardanians and community stakeholders speaking out in support of Cardano. Although the SEC has not officially filed a complaint against Cardano, support from important organisations like stakers and validators will be crucial for the protocol in the coming regulatory storms.
