Cardano founder Charles Hoskinson responded to allegations that Input Output Global (IOG) misappropriated over 318 million ADA from unredeemed wallets before the sale, calling the situation extremely personal and damaging.

In a post on May 18 on X, Hoskinson reflected on the reputational loss caused by the allegations, noting that this incident has reshaped his perspective on the relationship with the Cardano community.

He added:

"For a decade, I have been at the forefront. Not being afforded the benefit of the doubt here without strong counter-evidence means I do not have the connection I thought with some people."

Hoskinson added that after the publication of the external audit results, he intends to transfer control of his social media account to a media team and reduce his direct involvement.

For the first time, Hoskinson responded to the allegations on May 7, stating that IOG may take legal action against those accusing him of misappropriating unclaimed ADA from Cardano's 2017 token generation event.

According to a thread on social media by X user Masato Alexander, the protocol update in December 2020 introduced a function to reallocate ADA from unredeemed UTxOs to Cardano's reserves.

Alexander alleged that the Move Instantaneous Rewards (MIR) transaction subsequently redirected these funds without transparency or notification to the original voucher holders.

Hoskinson argued that investors had redeemed 99.8% of ADA vouchers. The remaining 0.2%, which was reclaimed under protocol rules after a seven-year period, was donated to Intersect, the Cardano industry coordinator.

He further stated that an external audit report will soon document the history of redemptions and the public sale process. Hoskinson also mentioned he would "write to stakeholders requesting retraction and apology."

Alexander opposed this complaint, citing a public statement from the interim CEO of Intersect that the company only received $7 million in 2024, far less than the estimated $600 million value of the disputed ADA. He also criticized the lack of a detailed public audit tracking the fund's cash flow.

Foundation And Emurgo Resolve Governance Process

On May 19, the Cardano Foundation issued a statement distancing itself from the operational aspects of ADA voucher redemption after 2021. The statement added that while they have received general updates, no detailed accounting information has been provided.

The Foundation stated:

"The effort to seek out and support those who still hold vouchers has been led by the IO team for the past four years."

The Foundation welcomes IOG's commitment to publishing the third-party audit report and recommends that this report include all transactions, MIR balances, and any profits generated during the fund management process.

Cardano's commercial arm, Emurgo, also defended IOG's efforts in the May 19 post. They stated that the redemption process has spanned seven years and includes multiple campaigns, third-party investigations in Japan, and Know Your Customer (KYC) verification.

Emurgo acknowledges:

"Although the majority of ADA vouchers before the sale have been successfully redeemed, there remains a small percentage that has not been redeemed."

The company further noted that the Shelley hard fork would render unredeemed ADA non-spendable, requiring them to act in order to redeem further.

The company also expressed concern about "excessive, baseless FUD," stating that the allegations based on limited facts have caused unnecessary harm to the ecosystem. The company agrees with IOG's call for an audit and urges the community to be patient.