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Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is October 15, 2023, and we're making a video about something a little new. I'm going to try a different way to communicate on certain topics because no matter how many times I discuss these topics, it seems like people really want to misunderstand or move in a different direction. So, I'm going to try one last time, and we're going to do something a little different.
I'm going to go ahead and share my screen. Here we go. This is Obsidian, and today's topic is thoughts on the XRP case. We're actually going to type things out because it's gotten to the point of parody at this point.
There are two different concerns about this case. The first concern is: Did Ethereum get a free pass? Did something happen so that Ethereum could get a free pass from the SEC? The second concern is whether people from Ethereum bribed or influenced the SEC to go after XRP. These are two different concepts. Just in case you understand, these are different concepts, and I know that might be hard for certain people.
What we're going to do is make sure that gets bolded: different concepts. Now, they might be interlinked or could have associative links in some way, but they are different concepts. Here’s some baseline stuff we're going to write down because I know it’s hard to grasp.
Baseline stuff:
1. Charles is not okay with corruption.
2. Charles does not like when people use relationships to improperly influence government policy.
3. Charles has never believed that XRP is a security, and there are things going back years where I've said that.
4. Charles has not taken the time to review the first concern, nor will he.
So, what is that first concern? We’re going to go back up to it: Did Ethereum get a free pass from the SEC? Why didn’t I take the time to review the first concern? Well, it’s because I really don’t care. And why don’t I care? Because it will be impossible to prove one way or the other.
We have this thing called COVID. Remember that? There’s overwhelming evidence that COVID was made in a lab and that U.S. government policy was wrong about it, but you know what? No one believes it who’s in a position of power, and it’s the same situation here. When you run into a situation of a free pass, a free pass can be lots of different things.
A free pass can be things like: I’m friends with the guy; the guy wants to have a job at some point from me; they don’t want to go hard on me because it’s too big and bad for the industry; it could be that they didn’t fully understand and thus left it to be; they didn’t think it was important; it could be corruption; it could be that maybe they think there’s a geopolitical advantage, for example, they want to keep that industry inside the country.
You can go down the list; there are lots of reasons for a free pass. Maybe Hinman and the other guys were friends with Joe; maybe they wanted a job; maybe there’s some money they could make. Corruption or favoritism could be at play. Maybe they thought that going after the number two cryptocurrency would be catastrophic for the industry.
You know, maybe they just didn’t really understand everything and said, “I don’t want to make a position on it.” Maybe they said, “We want to leave this particular thing in Silicon Valley.” Why would they want it in Silicon Valley? Because lots of donors are Silicon Valley people and have invested heavily in that ecosystem.
So, you can go from free pass land and have all kinds of reasons why. Well, I really don’t care, and let me just go ahead and emphasize that again. I don’t care. Why? Because it’s not really possible to know what’s going on in this particular person’s head unless he writes about it and tells you. Is he going to do it? No.
It’s impossible to prove one way or the other unless you do an investigation. But we don’t do that anymore. That’s correct; we don’t do investigations anymore in the United States. The United States just doesn’t do investigations anymore. We didn’t look into things like COVID; we didn’t really look into that. Where is the big committee for that? We didn’t look into the U.S. response to BLM. We didn’t look into the wasted 20 years of money spent on wars like Afghanistan and Iraq.
We didn’t really look into anything. You just keep going down the list. We just don’t look into this stuff anymore. We completely ignore it and move on. The declining human fertility rate? Male fertility has fallen by 50% in the last 50 years. Did you guys know that? No, we don’t really look into that.
Have we done an investigation into how bad sugar is for everybody? No, we don’t. The FDA is owned by those people. We only have four telcos in the United States, and it’s going to three because T-Mobile bought Sprint.
You just go down the list; we don’t really look into these things anymore. All of Gary Gensler’s conduct—do you honestly believe for a moment that we’re going to do an investigation? Do you actually think that’s going to happen when the other party takes over? No, not going to happen.
Unless you do a proper investigation, you won’t know why the free pass happened or if there was a free pass. You just won’t know. Yes, you can outline lots of things that you think are the case and prove to yourself that a person is corrupt, but that goes back to the original question: Did Ethereum get a free pass?
Maybe in your head you can believe that’s the case, and there are plenty of people like John Deaton and others who talk about this. You guys in the community discuss this a lot, but I don’t care because there won’t be an investigation to definitively prove and pull all these things together. Thus, it’s impossible to really prove one way or the other what’s actually going on because we just don’t talk about it anymore in the U.S. government.
As I said again and again, I’m not okay with corruption. I don’t like when people use relationships to improperly influence government policy. I never believed that XRP has been a security, and I’m not going to take the time to really dig into the whole free pass thing because it’s a completely pointless matter. It won’t prove anything; no one’s going to go to jail. The U.S. government doesn’t do investigations anymore on these types of things.
There are so many things to get angry about. I’ll give you another example from my personal life: the Audit the Fed movement in 2011. We spent an exhaustive amount of time going to Congress and trying to get them to do a Government Accountability Office audit of the Fed. The vast majority, a supermajority of your representatives, said, “Wait a minute, we should be doing this audit,” right? Did it happen? No.
Why is the Fed immune to being audited? We could do an investigation and look into it, but do we? No, because we don’t do that anymore. We don’t actually look into that stuff unless it’s political, and even when it’s political, the investigation really doesn’t go anywhere.
That’s why I don’t care, because nothing comes of those conversations. The only thing I spoke about historically was this: Did people from Ethereum bribe or influence the SEC to go after XRP?
We’re going to go ahead and put these three things down. Did people from Ethereum bribe the SEC to go after XRP? My first comment on that is: If so, then where is the evidence of that? That’s what I keep asking. Where is the evidence? Having Hinman meet with Joe Lubin and Vitalik and get a bunch of money—doesn’t it seem plausible that that bunch of money was connected to making sure that Ethereum is not a security?
Do you have an email that qualifies as evidence? Is there an email that says, “Hey, go after XRP”? Is there a recording? Is there some sort of hidden text? Is there a video of these types of things where they said, “Go after XRP”? Were there whistleblowers who said, “We were influenced and told to go after XRP hard”?
Do you have any of these things? No? You might have a money trail, and that money trail could be connected to this. How do you know that these two things are connected? They could have associative links, but how would you know that unless an investigation was done? We don’t do those anymore, do we?
We don’t investigate anymore. Look at all this stuff. Sugar is killing everybody in America; it makes us all fat, yours included. We lost half of our fertility rate. We have a huge consolidation of many industries, and no one seems to care about it. The gaming industry? Activision Blizzard just got bought by Microsoft.
We keep overthrowing countries and killing people, but we don’t even look into that. Afghanistan was an unmitigated failure, and we’re not going to look into any of the money we gave to Ukraine, are we? No, it’s just a terrible tragedy; we’ve got to move on.
We don’t do that here. A lot of people get free passes in the United States. Standard policy—I’m not okay with it. I’ve never been okay with it. I don’t like it when people do that, which is why I really hate the way our government runs.
I’ve said numerous times that XRP is not a security, but you know the thing is, why even bother investigating? Because you’re not going to get anything out of it. Did people bribe the SEC to go after XRP? Do you have any smoking gun evidence of that? No. So if you claim it, then you are pushing an unsupported conspiracy.
It would require a lot of leaps—a grand conspiracy. This is what we were talking about. I’ve seen everything from, “Well, that must mean you think they didn’t get a free pass.” Were we talking about that? No, we weren’t talking about that at all.
I saw a CoinDesk article this weekend—CoinTelegraph, excuse me. They say, “Charles thinks that it wasn’t corruption, just favoritism.” I spoke about this extensively when asked in an AMA, and I said, “Here it is.” I was lamenting that people can’t separate these two concepts.
Did they get a free pass from the SEC? Did people bribe and influence the SEC to go after XRP? They’re just utterly incapable of separating these concepts from each other. My original statements were about this, and I said at the time, and continue to say, I don’t care about this one because there’s nothing you can do about it without an investigation.
But we don’t do that anymore. You can make this list as long as you want, and there are lots of reasons why you’d give a free pass—everything from, “I just like the name Ethereum,” to “They gave me a big sack of money.”
Now, you guys in the community seem to be combining these two things together, and I say, “Alright, what evidence do you have?” Do you have an email, an audio recording? Let’s put audio there. Do you have hidden text? Do you have video recordings? Do you have whistleblowers that claim these things—that the SEC was bribed to go after XRP by someone from Ethereum, probably Uncle Joe?
If you don’t have that evidence, but you’re saying it, that is an unsupported conspiracy. That’s where the words “grand conspiracy” came from. I say it’s nuts to believe this. It is not in the best interest of Ethereum for any layer one to be attacked by the Securities Exchange Commission.
Why? Because if the SEC goes after a layer one, a later administration can use that case law. This is a point that seems to be missed again and again. If one layer one with similar facts and circumstances is hit by the SEC, then case law would exist that would be useful for other layer ones with similar facts and circumstances.
So, if XRP is a security, the SEC could use that same construct for Ethereum as a security. You might say, “Well, they would never do that because apparently the entire agency is controlled by Joe Lubin.”
Alright, well, does that mean if, for example, Trump gets elected or a Republican gets elected and there’s a new chairman of the SEC, that that same person would be beholden to the same political influences that somebody who no longer even worked there had years ago?
Alright, you could believe that, but if you are Uncle Joe, would you take that risk? Let’s say you can ask for two things: you can ask for a free pass, which helps everybody in the industry, but more importantly, it helps you, or you can ask for a free pass but then have them take out your opponent, XRP.
But why is XRP exactly an opponent? Why didn’t it have smart contracts at the time? Well, we forgot to put that in: no smart contracts. There was COTUS, but that wasn’t anywhere. No smart contracts, different industry.
So, bank settlement, interbank settlement, remittances—these types of things had no community control of consensus. There was no notion of mining. So, what else can you think of? These are the same ecosystems that have been around for a while and didn’t seem to interact with Ethereum. Not once did Ethereum ever come up in any conversation we had with Ripple.
So, why would you, when you have something that’s clearly in a different industry, a different competitive class, a different team of people, want to then go and try to weaponize a government agency, massively increasing your potential for these types of things to happen, which maybe could create an investigation or a problem for you down the road and then create case law?
Let’s highlight that right there for you. I know it’s hard, but we’re just going to keep going at it. Case law that would then be weaponized at a later date to go after you or, in the case of Joe Lubin or the consensus, guess what? They have an S there—crown jewels.
You’ve got to remember that Consensus had a boatload of token offerings, right? Your free pass idea—you can’t just touch Ethereum; you have to touch every single thing that Consensus was involved in. Because if you create and weaponize the law in a way that makes the SEC want to go after everything, well, anything that Consensus touched is now going to be a security, and that creates a problem, doesn’t it?
Doesn’t that by transitivity hurt Uncle Joe? But you know, let’s do it. Let’s just, even though they’re in a completely different industry, they don’t have smart contracts, there’s a different consensus model, they have a different adoption model, different governance model—all these things—let’s just take these guys out.
Well, maybe that doesn’t make a lot of sense, and that’s what my statement was. That’s why I say unless you show me some evidence, of which I haven’t seen any at all from anyone—these types of things, like somebody from the SEC asserting that they were in a meeting where Joe Lubin said this, or somebody else, some form of video or hidden text or an audio recording or an email—something floating around that actually shows that you can’t really say that there’s evidence that the people from Ethereum bribed the SEC to go after XRP.
What about all this stuff? Well, let’s go back to some baseline. I’m not okay with corruption. I don’t like it when people use relationships to improperly influence government policy. I don’t believe it was legitimate for the SEC to go after XRP, and I’m glad that they won.
I’m not going to take the time to look at Deaton or all these other things outside of a surface-level understanding of the free pass. Why? Because no investigation will ever be done. The real free pass is that if there was a free pass, the people who did the free pass will never be investigated because we don’t do that anymore in the United States.
We just don’t do it. We don’t look under those stones when the executive branch does something that is harmful to people, whether it be tax policy or financial policy. Here’s another great example: too big to fail. You guys remember that? The whole Occupy Wall Street, the 2008 crisis? Tell me, how many people went to jail when the banks collapsed and we had to merge all these things together? Outside of Bernie Madoff, not anybody. In fact, they got bigger.
We don’t do that anymore in the United States of America. That’s just how our legal system works. Am I okay with that? No, which is why we want to change things. Do we like it when people do that? No. But you know what? They also do this.
Charles reminded you guys that they do this in medicine, law, especially family law. They do this in telecommunications; they do this in the software industry. Oh yes, what else do they do this in? Well, let’s see here: drug development. Yeah, I’ll call it Pharma. Pharma is a huge one, right? Military? Oh yeah, look at the military contractors and all the crazy stuff that they do.
What other industries can we think of? Telecommunications, software, Pharma, military, medicine, law, education is another one. Yeah, the education cartel and how they’ve structured credentialing and all these other things. People just use that. Oh yeah, lobbying—that’s another one.
If you’re a congressman, you get to be a lobbyist after you leave. They do all this bad stuff; they use personal relationships and a revolving door. Bank regulation—that’s another one.
We have a term for this: we call this corporatism. Corporatism is where you use basically an unholy alliance of corporations and government, where the people who are responsible for regulating your big companies end up working for the corporations. They’re getting financial benefit from the corporations, and you can’t find a single big industry in the United States where this is not the case.
Whether it be Microsoft doing it, Pfizer doing it, Raytheon doing it, the big education lobbies doing it, the congressmen doing it themselves, the big banks doing it, the large hospital cartels doing it, the law firms doing it—especially in family law to keep the law a certain way. Half of American marriages end in divorce, and that gets weaponized.
Who do you think benefits from the weaponization of children and divorce? The law firms do because they make a fortune from it. In fact, you only have three big cell phone companies in the United States, and the ISPs are highly
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