The US SEC has labeled Cardano (ADA) a security in its latest lawsuit against Binance, sparking the reaction of pro-XRP lawyers.
The US Securities and Exchange Commission (SEC) recently filed charges against Binance for facilitating the trade of “unregistered securities” on its platforms. However, what particularly captured the attention of the XRP community is the SEC’s decision to label Cardano (ADA) an unregistered security in the lawsuit.
The watchdog alleges that Binance faciliated trading for “unregistered securities” such as BNB, BUSD, SOL, ADA, and FIL, among others.
“Couple of new ones in that bunch. Cardano finally takes one for the team,” Bill Morgan, an Australian-based pro-XRP attorney, remarked, speaking on Cardano’s presence in the list.
Couple of new ones in that bunch. Cardano finally takes one for the team. Sorry @IOHK_Charles
It’s a regulatory conspiracy. And #ALGO again. At least the #Ethereum free pass continues. https://t.co/GMuet2rsTu
— bill morgan (@Belisarius2020) June 5, 2023
Taking a page from Cardano founder Charles Hoskinson’s book, Morgan sarcastically called the recent development a regulatory conspiracy. He also called attention to the fact the agency labeled Algorand (ALGO) a security for the second time, further claiming that Ethereum has continued to enjoy its free pass.
Hoskinson’s “Conspiracy Theory” Remarks
Notably, Hoskinson argued last October that the XRP community’s belief that the US SEC colluded with Ethereum insiders to go after Ripple is a grand conspiracy. The IOHK Chief believes this belief held by some XRP community members is false.
Following criticisms from the XRP community, Hoskinson stood by his comments, stressing that it is not true that the SEC and Ethereum insiders are colluding to go after Ripple and XRP alone and no one else. Hoskinson backed his statements by pointing out that the regulatory watchdog has gone after other crypto-focused entities.
These remarks caused a rift between the XRP community and Hoskinson who originally supported Ripple in the SEC lawsuit. Amid the heated drama, the Cardano founder expressed his disappointment in how David Schwartz, Ripple’s CTO, handled the situation, asking Schwartz to tell the XRP community not to be conspirational.
SEC Says IOHK Sold Cardano as an Unregistered Security
Considering the disagreement between Hoskinson and the XRP community, the recent statements from the SEC have elicited reactions from XRP enthusiasts. Notably, in the Binance lawsuit, the SEC labeled ADA as a security which was sold by IOHK from 2015 to 2017. The SEC alleges that the company raised $62 million from the token sale.
The regulatory watchdog also argues that there is an investment contract between ADA holders and the three entities responsible for Cardano: IOHK, the Cardano Foundation and Emurgo. These are the same allegations leveled against Ripple and XRP.
It bears mentioning that, while the SEC has made these claims in its 136-page complaint, the agency has not officially filed charges against Hoskinson or IOHK. Recall that US Congressional candidate January Walker previously urged the entire crypto community to stand behind XRP against the SEC’s perceived overreach.
“What happens to one will happen to all,” Walker disclosed last December. A few months after these remarks, SEC Chairperson Gary Gensler asserted that all crypto assets besides Bitcoin are securities. The next target of the SEC’s enforcement actions remains to be seen.
Moreover, Jake Claver, Director at Digital Ascension Group and CEO of Beyond Broke LLC, recently asserted that XRP would stand out in the crypto scene as the ONLY asset with regulatory clarity once the SEC lawsuit ends.