By (MR_UMAIR)
The Cardano Foundation is preparing to release an audit report on its treasury holdings following serious allegations of fund misappropriation involving approximately $600 million worth of ADA tokens. The controversy has reignited scrutiny of Cardano founder Charles Hoskinson, who now finds himself at the center of a heated community debate.
The uproar began after claims surfaced alleging that Hoskinson used a “genesis key” to manipulate the Cardano ledger during the 2021 Allegra hard fork. Among the accusers is Masato Alexander, a known nonfungible token (NFT) artist, who asserted that Hoskinson redirected $619 million in ADA from reserve funds to gain control over the network’s treasury.
A particular transaction from October 24, 2021—classified as a “Move Instantaneous Rewards” operation—shows the transfer of over 318 million ADA tokens. According to critics, this enabled a reallocation of $ADA from reserve pools into staking and treasury wallets, raising concerns over transparency and governance.
In response, Hoskinson dismissed the allegations as misinformation. He explained that ADA redemptions remained open for three years after the transaction and emphasized that most of the 350 million ADA referenced had been claimed by the original purchasers through a process that spanned seven years.
“IOG never gave itself 350 million unclaimed ADA. This is a lie,” Hoskinson stated in a May 6 post on X (formerly Twitter). “The vast majority was claimed, and the remaining that was forfeited after seven years of waiting was donated to Intersect.”
The backlash from the Cardano community appears to have struck a nerve. In a May 18 update, Hoskinson revealed that he was “deeply hurt” by the mistrust shown by some community members in light of the claims.
“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,” he wrote. He also confirmed that an audit report is underway and hinted at stepping back from his personal communications: “After the audit report comes out, I’m going to likely turn my X account over to a media team and change the format of my AMAs and X spaces.”
A key figure in the blockchain world and one of Ethereum’s original co-founders, Hoskinson remains a prominent voice in decentralized technology. Speaking recently at Paris Blockchain Week 2025, he underlined the need for collaborative economic models in crypto to compete with increasing interest from traditional tech firms, driven by greater regulatory clarity.
As the Cardano community awaits the audit’s findings, the incident highlights the broader challenges of transparency and trust in decentralized governance.