Thread by @JohnEDeaton1

HOW Web3 & THE #ETHER FREE PASS WAS BORN:

Recently, @jack was blocked by @pmarca over Jack’s observation regarding the inherent interests of VCs related to Web3. What is Web3?

“Web3, much like other buzzwords you hear - Bitcoin, NFTs etc. - is based on blockchain technology.”

“As of now, most of it is based on the Ethereum blockchain. In fact, Ethereum co-founder Gavin Wood first coined the term Web3 in 2014. He now runs the Web3 foundation.” 👇
indiatoday.in/technology/fea…

Also in 2014, @gavofyork @VitalikButerin @ethereumJoseph @stevennerayoff and others orchestrated the World’s 🌎 first ICO (Ether). In 2017, Bill Hinman, as Director of Corporation Finance, arranged a meeting with Joe Lubin & @ConsenSys. That meeting took place December 13, 2017.

The initial meeting between Hinman & Lubin occurred at the height of the ICO craze, following #Ether’s successful crowd-sale model. But Hinman and the Lubin / Consensys meeting wasn’t about #Ethereum’s ICO. Instead, it was the beginning of a very mutually beneficial “alliance”.

Alliance isn’t my word. The next day @MattCorva, GC of @ConsenSys, publicly stated that ConsenSys and the Brooklyn Project was building an “alliance” w/ the SEC. Jay Clayton’s law firm, Sullivan & Cromwell, represented Lubin & ConsenSys when they met with Hinman in December 2017.

The following month, on January 25, 2018, SEC Chairman Clayton met with Andreesen Horowitz’s @cdixon and instructed Dixon to get together with select industry players and submit a proposal 📝 of how the @SECGov should proceed w/ digital assets.

How do we know all of this?

Crypto-law.us has assembled a video library of the insiders who participated in the free pass. Lowell Ness of Perkins Coie revealed something “that not a lot of people know” — a meeting between Jay Clayton and Andreessen Horowitz played a central role in later events.

Ness has said that after appearing at a Stanford University event in January 2018, Clayton “made his way over to see Andreessen the next morning, and he invited Chris Dixon to round up the industry players” and asked for “a proposal on where to go from here”. 👇👇👇👇

https://twitter.com/digitalassetbuy/status/1440860750226935816

But which industry players did Chris Dixon “round up”?#XRP & the #XRPLedger was created in 2012 by @JedMcCaleb,
@JoelKatz & Arthur Britto. XRP was the second Crypto Asset ever created after #Bitcoin
In January 2018, #XRP was the 2nd largest crypto asset by market cap - not #ETH.

Certainly, the second largest crypto asset would be represented in this industry group. But according to @CGasparino and @EleanorTerrett’s reporting, @Ripple was not invited by Dixon to be a part of this industry group. We know Lowell Ness was the lead attorney writing the memo📝

According to Ness he had been representing Andreessen Horowitz “on all their crypto investments since the beginning” and “[he] got the chance to write all that stuff.”
Ness said the “general reception” from the SEC when those meetings began “were really positive.”

He adds “it was an interesting dichotomy between their public facing incredibly vituperative statements that they were making and this interesting welcome that we got privately.”

So who exactly was represented in this industry group and received such a warm reception by the SEC?

We know several law firms were involved but who exactly did they represent? Ness stated he brought in a couple other law firms to help, but did anyone represent a non-ETH crypto project? When you read the memo 📝 and Safe Harbor Proposal, only one crypto is mentioned:
#Ethereum.

Why would #Ether be the only Crypto or Digital Asset referenced in providing a safe harbor? Once again, were all the industry players that Chris Dixon “rounded up” part of the #Ether Ecosystem? These questions need to be answered. Of course, the questions must first be asked.

Why wasn’t #XRP represented? Before claiming Ether is so different, consider how Vitalik described Ether’s ICO, insisting it would be “an opportunity for anyone to purchase ether” which he said was a “currency inside the #Ethereum system, sort of like the #XRP in Ripple.” 👇

https://twitter.com/CryptoLawUS/status/1436024031350771712

Some people attempt to dismiss the Ether Free pass as a conspiracy theory. Yet, they can’t refute what we’ve assembled
b/c all we’ve done is played their own interviews or speeches and made a timeline. People who were intimately involved have spoken out and recognized the truth.

Joseph Grundfest acted as an SEC liaison for @stevennerayoff who is the self-described Architect of the #Ether ICO. Grundfest isn’t a conspiracy theorist nor is he against #Ether. He has called into question Clayton and others’ motives in bringing the case against
#XRP. 👇👇👇👇

Even people who were part of the industry group chosen by Chris Dixon and Lowell Ness have commented the Ether Free Pass makes no logical or legal sense. Watch the video below 👇 and listen to Nancy Wojtas and Wendy Moore discuss how odd it was for Hinman to give Ether the pass.

https://twitter.com/digitalassetbuy/status/1443162434156511232

Nancy Wojtas disagreed with Hinman that #Ether was sufficiently decentralized to not be a security. She said according to Hinman’s speech, any project that does a little better than Ether is golden and co-panelist Wendy Moore of Perkins Coie adds: “Then why isn’t Ripple?”

These are people who helped get the free pass. There’s no conspiracy here - just plain old facts. Wojtas herself criticized Hinman’s actions: “There is no question. Ethereum violated the law in the SEC’s view when it issued its tokens.”

Why did Hinman do it? He collected $15 million from his law firm - a member of the Enterprise Ethereum Alliance (EEA) while at the SEC. Lowell Ness’ Perkins Coie is also a core member of the EEA. As stated, Lubin & Consensys was represented by Clayton’s firm, Sullivan & Cromwell.

Sullivan Cromwell brokered the deal of Consensys buying JP Morgan’s Quorum - a direct competitor of Ripple. The Quorum /JP Morgan Coin deal was announced 4 months before the lawsuit against Ripple and XRP was filed - as most senior SEC officials behind the lawsuit left the SEC.

Two months before the lawsuit, One River makes a $1B bet on #BTC and #Ether. Within weeks of leaving the SEC, Clayton goes to One River. Hinman “un-retired” and returned to his EEA law firm. The Director of Enforcement, Marc Berger, joined Hinman and the EEA at Simpson Thacher.

We learned that Hinman’s Ether Free Pass Speech closely followed the Lowell Ness Perkins Coie memo 📝. And after collecting $15m from Simpson Thacher, Hinman became a partner with Chris Dixon at Andreesen’s $2.2B Crypto Fund which is heavily invested in #BTC and #Ether.

Finally, its ironic that people who conspired to get a free pass are calling those exposing the truth with facts, conspiracy theorists. They might claim Andreesen Horowitz also invested in Ripple - attempting to deflect. But notice they don’t have #XRP in their Twitter handle. 👇