Key Takeaways:
Artist Masato Alexander claims that a 2021 hard fork allowed Cardano’s team to move 318M ADA from presale wallets to reserves.
Intersect confirms it received only $7M, far short of the $619M in question.
The controversy rekindles old doubts about Cardano’s early token distribution and governance mechanisms.
The Cardano Foundation is preparing to release an audit of its treasury holdings after new allegations surfaced accusing founder Charles Hoskinson of misappropriating over $600 million worth of ADA tokens.
The controversy centers on a 2021 transaction during the Allegra hard fork, in which 318 million ADA, valued at around $619 million at the time, was moved from presale addresses into the Cardano reserves.
The move has also sparked accusations of unilateral control and manipulation of the blockchain ledger.
Cardano Faces Tough Questions Over ADA Transfers
Non-fungible-token artist Masato Alexander brought the claims to light, alleging that Hoskinson used a “genesis key” to rewrite the ledger.
Alexander described the hard fork as a “two-step maneuver” that effectively erased the original UTxOs holding the ADA and reallocated them to the reserves controlled by Hoskinson’s team.
Alexander also pointed to a second transaction involving Cardano’s “Move Instantaneous Rewards” (MIR) feature, which was used to withdraw the funds from reserves.
He argued that most of the original token holders never reclaimed their funds and questioned how such a large sum could be moved without the consent of the original buyers.
Hoskinson addressed the claims on May 6, stating that the “vast majority” of the funds were either redeemed by original ICO buyers or donated to Intersect, the member-based organization involved in Cardano’s governance.
According to Intersect’s interim executive director, the group received around $7 million in funding, far less than the alleged $318 million. It’s unclear how much, if any, of the withdrawn funds went elsewhere.
Critics have also raised concerns about the lack of transparency surrounding the funds, which were reportedly staked and earned an additional 25 million ADA in rewards.
Hoskinson expressed frustration over the accusations and what he described as a lack of trust from the community. “It’s not possible for anyone to not take this personally,” he wrote on X.
“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,” Hoskinson stated.
He added that the experience has left him “deeply hurt” and he plans to change how he interacts publicly. “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.”
The upcoming audit is expected to provide clarity on the movement and use of the funds, but it may not be enough to resolve the community’s concerns.
For many, the controversy has reopened old wounds about Cardano’s early token distribution and raised broader questions about accountability in blockchain governance.
Cardano Market Dips as Hoskinson Defends Vision Amid Treasury Concerns
ADA slipped 4.6% to $0.7352 following allegations of treasury mismanagement, with trading volume rising by over 27% to $1.05 billion in 24 hours, according to CoinGecko.
Source: CoinGecko
In a recent interview, Cardano founder Charles Hoskinson responded to criticism by reaffirming the network’s long-term goals and acknowledging its current limitations.
“We know what’s wrong, and we know how to fix it,” he said, addressing growing concerns from both the investor community and broader crypto space.
Cardano has been repeatedly criticized for trailing behind in key areas like DeFi growth and stablecoin adoption. Its DeFi total value locked remains below $320 million, far behind Solana’s $7 billion.
Additionally, the network has yet to attract major stablecoins like USDT or USDC or build momentum around meme coin communities that have energized rival chains.
Still, Hoskinson pointed to Cardano’s $1.5 billion treasury as a major advantage and positioned the network as the ideal foundation for Bitcoin DeFi.
“It’s the biggest opportunity of our lives,” he said. “And Cardano’s architecture is the best to unlock it.”
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