The Cardano Foundation is preparing to release an audit of its treasury holdings following allegations that Charles Hoskinson, the network’s founder, misappropriated over $600 million worth of ADA tokens. The controversy stems from a 2021 transaction during the Allegra hard fork, where 318 million ADA — valued at approximately $619 million at the time — was allegedly moved from presale addresses into the Cardano reserves.
The transaction has prompted allegations of unilateral control and potential manipulation of the blockchain ledger.
Allegations of Unauthorized Ledger Adjustments
NFT artist Masato Alexander was the first to bring the claims to light, alleging that Hoskinson used a “genesis key” to rewrite the ledger, effectively reallocating ADA tokens to the reserves controlled by his team. Alexander also pointed to a second transaction involving Cardano’s Move Instantaneous Rewards (MIR) feature, suggesting that funds were withdrawn from the reserves under questionable circumstances.
Alexander claims that many original token holders did not reclaim their ADA and questioned how such a large sum could be moved without their consent.
Hoskinson addressed the accusations on May 6, asserting that the majority of funds were either redeemed by original ICO buyers or donated to Intersect, Cardano’s governance organization. However, Intersect’s interim executive director stated that only $7 million was received — a figure that significantly contradicts the alleged $318 million transaction.
Hoskinson’s Emotional Response and Community Backlash
Hoskinson expressed frustration over the allegations and what he perceived as a lack of community trust. In a statement on X (formerly Twitter), he said, “To not be given the benefit of the doubt here without strong evidence to the contrary means I don’t have the connection I thought with some people.”
The Cardano founder indicated that he plans to withdraw from public interactions, potentially handing over his X account to a media team after the audit report is released.
The audit is expected to provide clarity on the movement and use of the funds but may not be enough to quell concerns over potential misuse of the Cardano treasury. For many, the incident has reignited concerns over Cardano’s early token distribution and governance transparency.
