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Tokentus Investment CEO Oliver Michel comments on ETHGate, asserts that Ethereum’s ICO is similar to Ripple’s institutional sales of XRP.
Oliver Michel, the CEO of VC firm Tokentus Investment AG, recently commented on the ETHGate scandal, one of the most controversial topics in the crypto industry.
ETHGate Explained
For context, ETHGate involves allegations about the Ethereum team fostering relationships with top SEC officials to give ETH a regulatory edge over other crypto assets.
According to critics, Ethereum’s relationship with the SEC allegedly prompted former director of Corporation Finance William Hinman to declare ETH as a non-security in his infamous speech in June 2018.
As discussions about the ETHGate scandal intensified, Michel recently commented on the matter during a recent interview.
Famous XRP influencer Digital Asset Investor shared Michel’s interview on the X platform recently. Commenting, the XRP enthusiast slammed U.S. mainstream media outlets for ignoring controversies surrounding Ethereum’s early days.
🚨🚨Bombshell Incoming🚨🚨WOW!🚨🚨
Mainstream Financial Media: The good news is you've been able to successfully ignore and suppress the truth about ETHGATE in the United States. The bad news is the world's a big place and other countries aren't going to lie and suppress the… pic.twitter.com/Kvb67mxJUf— Digital Asset Investor (@digitalassetbuy) February 27, 2024
A Hot Story
Speaking in an interview with a Der Aktionär reporter, Michel portrayed the “ETHGate” scandal as a “really hot story,” emphasizing that he cannot wait to see how it ends.
He mentioned how Hinman cleverly declared Ethereum as a non-security. Michel also recounted how SEC chair Gary Gensler refused to give a direct response during a congressional hearing regarding whether ETH is a security.
Furthermore, the Tokentus Investment CEO noted that ETH could be considered a security, given that it launched through an Initial Coin Offering (ICO) in 2015.
Citing Judge Analisa Torres’ ruling in the Ripple case, Michel said Ethereum’s ICO is similar to Ripple’s institutional sales of XRP, which should have been registered with the SEC beforehand.
However, Michel said the Ethereum team offered ETH to institutional investors without fulfilling the necessary regulatory requirement. Additionally, Michel commented on other events from Ethereum’s early days, further pulling up an old post from top crypto advisor Steven Nerayoff.
According to the post, Nerayoff claimed to have a list showing the amount of ETH distributed to early Ethereum contributors.
Ethereum Insider Slams ETH Co-founder
Meanwhile, Nerayoff took a swipe at Ethereum co-founder Joseph Lubin, accusing him of violating the terms and conditions of ETH ICO.
This is worse than Institutional Sales by Ripple:
1. Lubin authored the ICO purchase agreements.👇
2. They prohibit speculative buying (e.g. Institutional Sales).
3. Lubin was COO of the entity.
4. Lubin violated terms himself by speculative buying in the ICO.More to come… https://t.co/j3zr6MRFkH pic.twitter.com/fs1xHFOqgE
— Steven Nerayoff (@StevenNerayoff) February 28, 2024
Nerayoff claimed that Lubin wrote the terms and conditions of the ICO to prevent speculative buying during ETH early sales.
To corroborate his claim, Nerayoff attached a screenshot of an email from Lubin asking Ethereum Foundation team members to review the terms and conditions before the ICO commenced.
However, Nerayoff claimed that Lubin violated the terms of ETH’s early sales by engaging in speculative buying during the event.
Worse Than Ripple’s Institutional Sales?
The early Ethereum advisor asserted that Lubin’s breach of ETH ICO terms is worse than Ripple’s violation of securities laws through its institutional sales.
Recall that a federal court ruled last year that Ripple violated federal securities laws by selling over $700 million worth of XRP to institutional investors from 2013 through 2020.
While the SEC claimed XRP is a security, the regulator never labeled ETH as a security either directly or indirectly.
ETHGate: One of the Biggest Financial Frauds
Furthermore, Nerayoff characterized the ETHGate scandal as one of the largest financial frauds ever witnessed.
The crypto advisor said many people find it hard to believe the alleged illicit actions of individuals like Lubin and Buterin. According to him, the sheer magnitude of the allegations and the potential consequences have left many in disbelief.
Despite the potential implications of the ETHGate scandal, Nerayoff noted that U.S.-based mainstream media has continued to ignore the story. However, he promised not to relent in his quest to expose the corruption that happened during Ethereum’s early days.