Cardano founder Charles Hoskinson has reacted to claims that the government can seize users’ tokens by asking him to confiscate them.
The founder asked how this was possible in a tweet on Thursday, joining a heated debate between Bitcoin maximalists and altcoin enthusiasts. He was particularly drawn to the conversation when a user remarked that the government can censor or seize assets on Cardano through him.
“I’d love someone to explain to me”
Hoskinson sought further clarification on what the user meant when he claimed that the founder can censor or freeze assets on Cardano with a directive from the government. “I’ll wait,” he added.
Notably, the Bitcoin maxi’s comment came despite Cardano’s shift into a fully decentralized network in September. For context, the layer one blockchain implemented the Chang upgrade last September and entered the Voltaire era, a phase in its roadmap where power shifted to every Cardano holder, represented by stake pool operators (SPOs) and delegated representatives (dReps).
Prior to the upgrade, Hoskinson and other major stakeholders of the Cardano network burned their genesis key, which offered them unique access to the blockchain. As a result, Hoskinson’s reaction expressed his surprise that someone with an understanding of blockchain technology could make such comments.
Nonetheless, Hoskinson had earlier noted that it would take time for people to understand what had really happened on Cardano. He made the remark when a similar comment circulated in March. According to him, it would take years and strong media publicity for people to finally understand that Cardano is fully decentralized.
How It All Came About
The comment originated from a clip where Robinhood’s CEO, Vlad Tenev, noted it is time to move beyond Bitcoin and meme coins to real-world asset tokenization on the blockchain. This came after Robinhood launched a protocol that allows European users to trade American stocks directly on its platform.
A Bitcoin proponent, Breeadman, posted the video, triggering a debate within the crypto community. A user claimed that if RWA tokenization gains momentum, there would be no use for Bitcoin again.
Meanwhile, the debate on whether governments can seize Bitcoin emerged after Breadman claimed that governments can seize tokenized stocks but cannot confiscate self-custodied BTC. When some altcoin proponents clarified that the feature applies to all other cryptocurrencies, a comment emerged that the government could pressure Hoskinson and other founders to censor or confiscate users’ assets.
However, this is not possible on Cardano, following its fully decentralized feature. Hoskinson also clarified that there is no backdoor to Midnight, the forthcoming privacy-focused sidechain on the Cardano network.
Remarkably, several misconceptions are widespread regarding Midnight, particularly its data-privacy claims. Some speculate that law enforcement can access users’ information as part of Midnight’s regulatory compliance clause and can freeze users’ assets using the obtained details.
In truth, Midnight can provide enforcement agencies with access to data, but only after they follow the necessary legal processes. Nonetheless, this would be a selective disclosure that does not involve confiscating users’ assets.
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