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Charles Hoskinson, the founder of Cardano, recently voiced his frustration with the U.S. Securities and Exchange Commission (SEC) for labeling ADA, Cardano’s native token, as a security. This reaction comes from the SEC’s ongoing litigation against prominent cryptocurrency exchanges like Kraken, Binance, and Coinbase, where ADA has been repeatedly cited as a security.
Hoskinson’s Critique: Ethereum and Bitcoin’s “Free Pass”
Hoskinson’s anger is primarily directed at the SEC’s apparent double standards in treating cryptocurrencies. While Bitcoin and Ethereum have been declared non-securities, other cryptocurrencies like ADA are not afforded the same classification owing to their decentralized nature. According to Hoskinson, this differentiation lacks transparency and a clear application of the Howey Test, a legal standard used to determine what constitutes a security.
The XRP community, long embroiled in their battle with the SEC, has shown a mix of reactions to Hoskinson’s statements. Some, like Digital Perspective, empathize with Hoskinson’s frustration, having experienced similar challenges. Others, like Mark Phillips, view Hoskinson’s recent outburst as a belated recognition of the broader challenges facing the crypto industry in the face of regulatory scrutiny.
Legal experts, including Attorney John Deaton, who represents XRP holders, have called for the SEC to establish more precise regulatory frameworks applicable across all crypto ecosystems. This sentiment is echoed within the broader crypto community, which seeks more predictable and fair regulatory practices.
Bitcoin’s Decentralization Questioned
Adding to the controversy, Hoskinson has challenged the widely held belief in Bitcoin’s decentralization. He suggests that the concentration of mining power in a few entities undermines its decentralized status, a claim countered by industry leaders like Adam Back and Erik Voorhees. Back defends Bitcoin’s organic growth and decentralized nature, while Voorhees debunks the myth of mining pools’ control over Bitcoin’s hashrate.
Amidst these debates, ADA’s market performance remains a point of interest, currently trading at $0.374. The crypto community, especially stakeholders in projects like XRP and Cardano, are closely monitoring these developments, hoping for a regulatory environment that fosters innovation while ensuring investor protection.
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