In a recent series of tweets, lawyer John E Deaton, who is known for his pro-XRP stance, hinted at the existence of damaging information regarding ETH Gate that could soon be revealed. These tweets were sparked by the comments made by Steven Nerayoff, an early advisor to the Ethereum network, who had criminal extortion charges against him dismissed in May of this year.
Deaton’s response to Nerayoff’s lawyer, Michael Scotto, expressed his belief that the day would come when the full truth about the matter would be revealed, bringing it one step closer. Deaton also speculated that Nerayoff’s eagerness to disclose what he knows may have caused him to jump the gun.
ETHGate refers to a theory that suggests Ethereum received preferential treatment from U.S. regulators, while other cryptocurrencies, such as XRP, faced regulatory scrutiny. The Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs, the parent company of XRP, in December 2020, accusing them of conducting an unregistered digital asset securities offering that raised $1.3 billion.
Deaton rehashed allegations he had previously discussed in an article published on Crypto LawUS. He claimed that Ethereum had been favored by the SEC due to “massive conflicts” of interest involving William Hinman, the former Director of the SEC’s Division of Corporation Finance. These allegations coincide with Nerayoff’s own explosive tweets, questioning the legitimacy of the regulatory pass given to Ethereum.
Deaton believes that Nerayoff could provide valuable insider information on the matter. Nerayoff himself confirmed this by simply stating, “I have the map,” in response to Deaton’s tweet about knowing where all the bodies are buried. Nerayoff recently won a three-and-a-half-year legal battle when extortion charges against him were dismissed. His defense argued that he was the victim of an elaborate setup designed to gather evidence against prominent figures in the crypto industry. The dismissal of the case suggests that Nerayoff may possess incriminating evidence against U.S. authorities, potentially related to the Ethereum free pass.
These tweets also caught the attention of Charles Hoskinson, one of Ethereum’s founders and the founder of Cardano. Hoskinson acknowledged the possibility that personal relationships could have influenced regulatory decisions but dismissed the idea of Ethereum actively bribing the SEC. He responded to Deaton by saying, “Absolutely personal relationships and backroom stuff likely played a role. It happens every day with blackrock, chase, Goldman Sachs, big pharma, the telcos, the defense industry, and many others. I don’t believe Ethereum bribed the SEC to go after ripple. That’s the conspiracy part that makes no sense at all to me. Ripple wasn’t even in the smart contract space.”
It’s important to note that at the time of writing, XRP was trading at $0.4925.