In a discussion that kicked off on two Ontario crypto exchanges with a recent C$30,000 limit on altcoin purchases — which excluded Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) — Ethereum founder Vitalik Buterin took a look at XRP, Which is not taken very kindly by David Schwartz, chief technology officer at Ripple.
In response to the tweet, Buterin praised the Ethereum community’s deterrence against regulations granting ETH privileges over other cryptocurrencies. David Hoffman, founder of the decentralized media and education platform Bankless, responded to Buterin’s response and said he would not consider if they restrict XRP.
Buterin joined in the XRP bashing, claiming, “They really lost their right to protection when they tried to throw us under the bus as ‘China-controlled’.” Later, Schwartz himself joined the discussion.
Buterin was referring to Ripple’s defense in its ongoing legal battle with the US Securities and Exchange Commission, claiming that XRP should not be considered as collateral because Ether and Bitcoin (BTC) are similar in nature, and even called the top two of China’s controlled cryptocurrencies. Ripple is currently fighting a lawsuit from the SEC over the alleged unauthorized sale and issuance of XRP tokens.
Schwartz reiterated Ripple’s previous claims that ETH and BTC are securities and compared the miners in the ecosystem to eBay shareholders. He said:
“I think it is perfectly fair to compare miners in Proof of Work systems to corporate shareholders. Just as eBay shareholders earn from residual friction between buyers and sellers that eBay does not eliminate, so do ETH and BTC miners.”
Schwartz concluded his tweet with a question to Buterin, asking him if the government or the market should settle the security controversy.
The potential status of Ether as collateral has become a hot topic during the ongoing lawsuits, with Ripple claiming that the SEC has a clear bias against it and favors Ethereum. In an interview in 2021, Ripple CEO Brad Garlinghouse confirmed that the US Securities and Exchange Commission helped ETH surpass XRP as the second digital currency.
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Whether cryptocurrencies are securities or not, there has been a long-running debate due to the lack of regulatory guidance. Bitcoin is considered an asset by the majority of regulators around the world, while there is still an ongoing debate about the state of ETH due to its initial coin offering prior to mining.