The ETHGate resurfaces! The ETHGate is a conspiracy theory born on social networks according to which the cryptocurrency Ethereum (ETH) would have benefited from a preferential treatment from the regulators. The Securities and Exchange Commission (SEC) is directly implicated. According to proponents of the theory, this more favorable treatment has allowed Ethereum to continue its growth and development while its competitors have been punished more severely, including XRP.
The accusations highlight the inconsistency of regulators in their treatment depending on the cryptocurrency involved. For example, Binance or even Crypto.com were able to create centralized tokens (BNB, CRO) while others like Ripple were never allowed to do so. At the same time, Ripple’s rival, Stellar, was able to register as a non-profit organization by publishing its source code, which kept it out of trouble with the SEC.
Similarly, there are suspected cases of fraud (including accusations of insider trading in Ethereum’s infancy), but very difficult to prove and the Ethereum Foundation is strangely escaping the regulators’ radar for now.
For the time being, ETHGate appears to have little impact on the Ethereum cryptocurrency. SEC Director Hinman announced back in 2018 that regulators would not qualify either Bitcoin or Ethereum as securities, which has crippled Gary Genslen and Jay Clayton’s work at the SEC, reports the Foreign Press.
SEC lawyer speaks out on Ethereum and the ETHGate scandal
A lawyer working with the SEC actually said the opposite, demonstrating the difficulties created by the rejection of this qualification:
“I don’t want to get too technical but… there is no action that [the SEC] has taken to say that Bitcoin is not a security, that Ether is not a security.”Attorney at Law at the SEC
The free market eventually figures out the truth— Pomp 🌪 (@APompliano) April 10, 2022
One wonders what effects ETHGate may have for individuals and more globally for Ethereum. Keeping in mind that Ethereum is the second largest crypto, with a market capitalization of over $400 billion, it is likely that it will eventually come under further scrutiny by the SEC. According to some users, “it’s only a matter of time” before regulators turn to its case (and others) more seriously. Similarly, public opinion may eventually put pressure on regulators.