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Crypto media analyst Joshua Jake has thrown his weight behind XRP community members, stating that they were correct in their allegations about Ethereum.
In an X post yesterday, Jake said XRP community members were right about the ETHGate scandal. Surprisingly, he emphasized that the ETH Gate scandal could be bigger than FTX’s.
Notably, “ETH Gate” is a theory alleging that Ethereum officials established close relationships with insiders of top government agencies, especially the SEC, to provide a favorable regulatory environment for the cryptocurrency.
ETHGate Echoes Feds Controversial Formation
According to Jake, the ETH Gate scandal echoes the controversial formation of the United States Federal Reserve in 1910. At the forefront of the scandal is the relationship between former SEC officials – Jay Clayton and Bill Hinman – and Ethereum, Jake said.
The crypto analyst said evidence suggests that Consensys, a blockchain company owned by Ethereum co-founder Joseph Lubin, lobbied the SEC for the “ETH free pass speech.”
Recall that Hinman, in his infamous speech in June 2018, declared BTC and ETH as non-securities. Jake pointed out that the Hinman speech spotlights regulatory favoritism, emphasizing that other crypto projects faced massive crackdowns for conducting an initial coin offering (ICO) similar to Ethereum.
SEC Bias Could Undermine Its Credibility in Crypto Regulation
The analyst highlighted Ripple as one of the recipients of the SEC’s crackdown. He stated that the Ripple lawsuit sheds light on the potential conflicts at the SEC, indicating the regulator’s contrasting treatment of ETH and XRP.
“Why the disparity? Ethereum gets a regulatory nod while Ripple faces a lawsuit,” Jake remarked.
🤔 4/5 Why the disparity? Ethereum gets a regulatory nod while Ripple faces a lawsuit. It's a tangled web of interests with SEC officials linked to Ethereum's allies. This bias has significant implications for the SEC's role and credibility in crypto regulation. pic.twitter.com/uWAd0RDJHV
— Joshua Jake (@itzjoshuajake) November 8, 2023
Furthermore, Jake added that the SEC’s bias could undermine its credibility in regulating the crypto industry.
Pro-XRP Lawyer Reacts
Reacting, pro-XRP lawyer Bill Morgan said the expert contrasted SEC’s regulatory favoritism to Ethereum with its enforcement actions against Ripple.
Attorney Morgan raised a pertinent question, asking how long the market would take to correct the distortion created by the SEC enforcement action.
You contrast the regulatory favouritism shown to Ethereum with the harsh treatment the SEC directed at other ICOs and its (arbitrary) or ill-motivated decision to sue Ripple. Whether it was an intention to create a monopoly for Ethereum or give it a big head start (the Ripple… https://t.co/NQ6hVK8BJO
— bill morgan (@Belisarius2020) November 9, 2023
SEC Actions Helped ETH Secure Second Spot
He emphasized that the distortion helped Ethereum to secure the second spot in the global crypto ranking over better competitors.
Notably, before Hinman gave the infamous speech, both ETH and XRP were in a tight contest over which crypto asset would rank as the second-largest crypto by market cap.
At press time, ETH is ranked second, with a market cap of $252.43 billion. However, XRP stands as the third-largest crypto asset with a valuation of $86.53 billion.
Ethereum Corruption Is Bigger Than FTX
Meanwhile, Jake’s remark comes hours after Steven Nerayoff, a prominent crypto adviser, alleged that Ethereum’s corruption is 1000x bigger than the ones committed by FTX founder Sam Bankman Fried (SBF).
The crypto adviser alleged that Ethereum co-founders Joseph Lubin and Vitalik Buterin had secret dealings with corrupt government officials, including SEC chair Gary Gensler and former chairman Jay Clayton.
Ethereum is the fraudulent elephant in the room in plain sight 1000x bigger than SBF. Joe Lubin & Vitalik Buterin have been the front with corrupt officials at the highest levels of federal agencies such as Clayton, Gensler & many others. Cover this now.
— Steven Nerayoff (@StevenNerayoff) November 2, 2023