Cardano’s Hoskinson refutes claims of ADA misappropriation, labeling them as highly personal and harmful.

Charles Hoskinson, the founder of Cardano, elaborated on accusations claiming that Input Output Global (IOG) misappropriated over 318 million ADA from unclaimed pre-sale wallets. He described the allegations as profoundly personal and damaging.

In a post dated May 18, Hoskinson expressed the significant impact these claims have had on his reputation, explaining that they have altered his perception of his bond with the Cardano community.

In his remarks, he stated:

“For a decade, I’ve been on the front lines. 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.”

Following the announcement of an external audit, Hoskinson mentioned his plans to delegate control of his social media accounts to a media team, thereby reducing his direct interaction with followers.

Legal Action and Audit Approaches

On May 7, Hoskinson responded to the allegations, indicating that IOG might initiate legal proceedings against those claiming he redirected unclaimed ADA from Cardano’s 2017 Token Generation Event.

A social media thread by user Masato Alexander pointed out that a protocol update in December 2020 introduced a feature that transferred ADA from unredeemed UTxOs to Cardano’s reserves.

Alexander accused the subsequent Move Instantaneous Rewards (MIR) transaction of funneling these funds away without informing the original voucher holders.

In response, Hoskinson clarified that nearly all ADA vouchers, 99.8%, had been redeemed. The leftover 0.2% was returned to Intersect, the organization coordinating Cardano’s industry after being recovered under protocol rules following a seven-year timeline.

He mentioned that an external audit report is expected to provide an account of the redemption history and the crowdsale process. Additionally, Hoskinson announced plans to reach out to relevant parties demanding corrections and apologies.

Alexander negated Hoskinson’s assertion, referencing a public comment from Intersect’s interim executive director, which indicated that only $7 million was received in 2024, significantly lower than the disputed ADA’s estimated $600 million value. He also pointed out the absence of a thorough audit tracing the fund flows publicly.

Foundation and Emurgo Address Governance Procedures

On May 19, the Cardano Foundation released a statement clarifying its distance from the operational aspects of ADA voucher redemption after 2021. The statement noted that while it received general updates, it did not have access to detailed financial reporting.

The foundation affirmed:

“The effort to locate and support remaining voucher holders has been led by the IO team over the past four years.”

It welcomed IOG’s commitment to publish a third-party audit and suggested that it encompass all MIR transactions, balances, and any returns generated throughout fund administration.

Emurgo, Cardano’s commercial branch, stood by IOG in a post on May 19. It detailed that the seven-year redemption process included various campaigns, third-party investigations in Japan, and Know Your Customer (KYC) processes.

Emurgo recognized:

“While the vast majority of the pre-sale ADA vouchers have been successfully redeemed, there was a small percentage that had gone unredeemed.”

The company noted that the Shelley hard fork would have rendered unredeemed ADA unspendable, which necessitated their transfer for further redemption opportunities.

The firm also expressed concern regarding “excessive, unwarranted FUD,” indicating that accusations made without sufficient facts have caused unnecessary harm to the ecosystem. It echoed IOG’s call for an audit and encouraged the community to remain patient.