Ripple and Ethereum Under Fire: Decoding the Crypto Debate Sparked by SEC’s Latest Moves

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What initially seemed to be a sarcastically heated but harmless debate between Ripple CTO David Schwartz and Cardano Founder Charles Hoskinson recently turned into a fiery debate on X. Their replies revealed Many key revelations, the roots of most of which can be traced to SEC Chair Gary Gensler’s testimony before Congress over the classification of Ethereum.

Schwartz’s Revelation on XRP Holdings

During a back-and-forth with Charles Hoskinson, David Schwartz disclosed that he is probably the biggest whale of XRP holdings. In his latest reply,

Schwartz wrote “I had about 26 million XRP. I sold BTC to buy XRP and ETH.” 

His revelation dispelled rumors spread by a crypto community member who claimed the Ripple CTO sold billions of XRP to buy ETH and other cryptocurrencies, allegedly based on statements from the SEC.

Schwartz clarified that he never liquidated XRP to acquire other cryptocurrencies, except for some “unusual purposes.” He also explained his risk minimization strategy over the years: selling specific assets when they reached their new all-time highs.

Bill Morgan’s Correction to SEC’s Position on Ethereum

While this heated debate was occurring, lawyer Bill Morgan posted on X his thoughts on correcting misleading statements suggesting the SEC classified Ethereum as a security. 

He noted that the SEC is currently investigating whether certain offers or sales of Ethereum can fall into the umbrella term “securities,” highlighting the fact that the token itself isn’t necessarily a security. Morgan’s clarification, although not part of the debate, helped frame the debate and reminded readers of the importance of understanding the difference between a token and its sale context.

Ripple and Cardano: ETH Gate Debate

Coming back to the same fiery debate, Schwartz and Hoskinson also engaged in a contentious discussion about the ongoing hot topic—the ETH Gate, a theory that tends to suggest the SEC has always had a regulatory bias towards Ethereum. 

Hoskinson also openly rejected and dismissed the XRP community’s claims that Ethereum insiders bribed the SEC to target Ripple’s XRP. He says that XRP supporters had unfairly targeted him, leading to significant online harassment. 

However, Schwartz questioned back Hoskinson’s statements about the lack of evidence for the ETH Gate theory, pointing out discrepancies in the SEC’s treatment of Ethereum and Ripple.

He asked, “So, was Hinman not intimately involved? Did he not have a financial interest in Ethereum? Did he recuse himself? Or is that not evidence for some reason?”

Hoskinson responded, arguing that his remarks were taken out of context and that he didn’t claim the SEC had a grand conspiracy against Ripple. 

A Call for Clarity Amidst the Debate

The back-and-forth between Schwartz and Hoskinson exemplifies the deep-seated tensions within the crypto community regarding SEC enforcement practices.

As the SEC v. Ripple case is still proceeding in its final stages, the debate underscores how SEC Chair Gary Gensler should focus more on transparency, fairness, and a clear regulatory framework that does not harass the mental state of crypto community members but pushes the crypto market towards innovation.