Cardano man warns that the SEC will come for EOS

Charles Hoskinson – one of the creators of Cardano and head of the organisation guiding its development, IOHK, has warned that he believes the US Securities Exchange Commission will be looking very closely at its rival, EOS. 

Speaking at the Cardano-centric PlutusFest, a get-together for the Cardano community that offers it the chance to showcase the cryptocurrency’s  programming platform for smart contracts, one of its keys creators has voiced his belief that blockchain rivals EOS will be well in the sights of the SEC soon.

According to the CryptoBriefing report on a press conference associated with the event, which took place today at Edinburgh University’s Blockchain Technology Laboratory, Hoskinson aired his opinion that Daniel Larimer and the rest of the EOS team will eventually attract the ire of regulators over that token’s massive $4bn ICO. Calling the crowd-fund “egregious”, Hoskinson was pretty categorical in his criticism, telling the assembled crowd that he couldn’t “imagine how [EOS’ parent company, Block.One are] not going to have some sort of issue with the SEC.”

He then, apparently, went on to explain his issues with the EOS token sale and why he believed it fell under the SEC’s purview with regards to protecting US investors from harmful financial activity. He then went on to say that, in fact, the Commission “needed” to take action, due to EOS’ “utter lack of respect” for those who had put their money into it.

EOS’ extended, year-long ICO ended up being by far the biggest the sector has seen – netting it a war chest of around $4bn. Its roll-out has been problematic, however, including issues with a botched mainnet launch, hacking, and – perhaps most worryingly – extremely low uptake of distributed applications (dApps) considering the amount of money being ploughed into their creation. While the EOS ICO was not open to customers from the USA, the large secondary market for the EOS in the territory – and the sheer size of the sale behind them – makes the project’s parent company, Block.One, a prime target for testing whether it falls into the SEC jurisdiction.

Cardano, also a blockchain platform and thus a clear potential rival to EOS and Ethereum, has not been without issues since it raised $63m in funding way back (relatively speaking) in 2016.

In contrast to EOS – which has received criticism for its centralised and pseudo-corporate nature, Cardano is run on far more academically minded principles. However, a recent spat between IOHK, which created the crypto and continues to drive its development, and the foundation it created to oversee the intellectual property and community it created, has led to IOHK taking a much more over-arching role in the whole venture, effectively freezing out the Foundation altogether for now.

Hoskinson, however, appears confident that IOHK will not be on the SEC radar – because, a) it raised the vast majority of its (comparatively small) funding from regulated investors in Asia, and b) because its fundraising ended before the SEC began to warn ICOs that they should be careful of their resemblance to Securities – which came with its report into hacked ICO, The DAO, in mid- 2017.