In a series of tweets that have captured the attention of the crypto community, John E Deaton, a lawyer known for his pro-XRP stance, alluded to the existence of damning information about ETH Gate that could be disclosed soon. His comments come in the wake of tweets from Steven Nerayoff, an early adviser to the Ethereum network, who recently had criminal extortion charges against him dismissed in May this year.
Deaton’s statement was a response to Nerayoff’s lawyer, Michael Scotto, who tweeted, “My client Steven Nerayoff fought and won the battle of a lifetime. Steve has been advised to follow proper procedures and is fully committed to making all his facts known at a time and manor that serves the interests of justice and the people. #staytuned.”
Deaton responded, “I’ve always said that one day we will get the full truth. Today is one day closer.” He also speculated about Nerayoff’s intent to disclose what he knows, suggesting Nerayoff might have jumped the gun due to his eagerness to tell the truth.
ETHGate refers to a theory suggesting that Ethereum received preferential treatment from U.S. regulators, while other digital assets like XRP have faced regulatory scrutiny. Notably, the SEC filed a lawsuit against XRP parent Ripple Labs in December 2020 for “raising $1.3 billion through an unregistered, ongoing digital asset securities offering.”
XRP Army Hopeful: Will ETH Gate Finally Be Exposed?
In earlier tweets, Deaton rehashed allegations he previously discussed in an article published on Crypto LawUS. He alleged that Ethereum had been favored by the Securities and Exchange Commission (SEC) due to “massive conflicts” of interest involving William Hinman, former Director of the SEC’s Division of Corporation Finance.
This closely follows Nerayoff’s own explosive tweets, questioning the validity of the regulatory pass given to Ethereum. Nerayoff stated, “It’s ‘agency created law’ (whatever that means), and how exactly did Ethereum even satisfy this magical agency pixie dust?” He further questioned the role of various officials in potentially aiding Ethereum in acquiring its regulatory free pass.
According to Deaton, Steven Nerayoff could be a vital source of insider information. Nerayoff himself confirmed this when he simply stated, “I have the map,” in response to Deaton’s speculative tweet about “knowing where all the bodies are buried.”
Nerayoff was involved in a three-and-a-half-year legal battle that he won in May of this year after a New York judge dismissed extortion charges against him. The dismissal came after federal prosecutors admitted they were “unable to prove the charges in the Indictment beyond a reasonable doubt.”
Nerayoff’s dismissal raised eyebrows because it’s uncommon for prosecutors to drop a case after obtaining an indictment. Remarkably, Nerayoff’s lawyers claimed that he was the victim of an elaborate setup aimed at obtaining evidence against prominent figures in the crypto industry. The dismissal of the case could mean that Nerayoff has something incriminating on US authorities, possibly related to the Ethereum free pass.
The tweets also drew the attention of Charles Hoskinson, one of Ethereum’s founder and Cardano founder, who opined that personal relationships could have influenced regulatory decisions, but ruled out the idea of Ethereum actively bribing the SEC.
“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,” Hoskinson responded to Deaton.
At press time, XRP traded at $0.4925.
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