Hoskinson Denies Accusations of Misappropriating ADA, Calling Them Deeply Personal and Harmful Acts

The founder of Cardano, Charles Hoskinson, responded to allegations that Input Output Global (IOG) misappropriated over 318 million ADA from wallets before selling unconverted assets, describing the situation as extremely personal and damaging. In a post on May 18 on X, Hoskinson reflected on the reputational damage caused by the allegations, noting that the incident has reshaped his perspective on the relationship with the Cardano community. He added: "For a decade, I have been on the front lines. The lack of benefit of the doubt here without strong evidence to the contrary means I do not have the connection I thought with some people." Hoskinson further stated that after the announcement of the external audit results, he intends to transfer control of his social media accounts to a media group and reduce his direct involvement. Legal Opposition and Audit Plan For the first time, Hoskinson responded to the allegations on May 7, stating that IOG may take legal action against those accusing him of misdirecting unrequested ADA from the 2017 Cardano token creation event. According to a thread on social media by user X Masato Alexander, the protocol update in December 2020 introduced a function to reallocate ADA from unspent UTxO to Cardano's reserves. Alexander accused that the Move Instantaneous Rewards transaction (MIR) subsequently redirected this amount without transparency or notifying the original certificate holders. Hoskinson rebutted that investors had exchanged 99.8% of ADA tokens. The remaining 0.2%, which was reclaimed according to the protocol rules after a period of seven years, was donated to Intersect, the coordinating agency of the Cardano industry. He also stated that an externally audited report would soon record the history of the redemption and the public sale process. Hoskinson also mentioned that he would "send a letter to stakeholders requesting a withdrawal and an apology." Alexander opposed this complaint, citing a public statement from the interim CEO of Intersect that the company only received $7 million in 2024, much 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 the ADA voucher redemption after 2021. The statement further noted that while it had received general updates, it did not provide detailed accounting information. This fund declares: "Efforts to seek out and assist those who still hold purchase vouchers have been led by the IO group for the past four years." The fund welcomes IOG's commitment to publishing a third-party audit report and recommends that this report include all transactions, MIR balances, and any profits generated during the fund management process. The commercial department of Cardano, Emurgo, also defended IOG's efforts in a post on May 19. They stated that the redemption process spans seven years and includes multiple campaigns, third-party investigations in Japan, and Know Your Customer verification (KYC). Emurgo acknowledges: "Although the majority of ADA certificates have been successfully exchanged before selling, there is still a small percentage that has not been exchanged." The company further stated that the Shelley hard fork would render unconverted ADA unspendable, forcing them to take action to convert more. The company also expressed concern about "excessive, unfounded FUD," stating that the accusations 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.