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Cardano founder Charles Hoskinson launched a blistering attack on the U.S. Securities and Exchange Commission (SEC) in a recent livestream, accusing it of giving Bitcoin a “complete pass” over the question of whether it’s sufficiently decentralized to not be considered a security.
“If you subpoena and attack about three different entities, you could perform a 51% attack on Bitcoin because that's the way the hash power works,” Hoskinson said. “But it's decentralized, apparently. And Team Orange gets a complete pass.”
Describing the SEC’s treatment of Bitcoin as an “absolutely pathetic joke,” Hoskinson queried the difference between Bitcoin, Ethereum and Cardano. “Explain it to me like I'm five years old, run the goddamn Howey Test on it and show me the difference between the two,” he said, arguing that Bitcoin’s “orange pill moonboys” have an expectation of returns.
Accusing the SEC of wasting hundreds of millions of dollars in a “Pyrrhic war that's being fought on the industry,” the Cardano founder said that eventually, “they’ll lose court case after court case, as they already have. And we'll continue. And then at some point, it'll stop. There will not be an apology. There's not going to be any money that comes back.”
Railing against “unaccountable” government and regulators, Hoskinson praised libertarian lawmakers, saying that “the only people that seem to improve the situation are the people that are unraveling the government.”
“The entire reason cryptocurrencies exist is that we're trying collectively to reestablish the social contract, because the social contract is horrifically broken,” he added.
The SEC has repeatedly asserted that Cardano (ADA) is a security in lawsuits directed at Binance and other crypto exchanges. The blockchain research and engineering firm behind Cardano, Input Output Global (IOG) has refuted the SEC’s claims, arguing that its complaints against Binance and Coinbase contain “numerous factual inaccuracies,” and that “under no circumstances is ADA a security under U.S. securities laws.”
Undeterred, the SEC has repeated its claim that Cardano is a security, most recently in a new round of charges filed against crypto exchange Kraken.
Edited by Stacy Elliott.
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