Charles Hoskinson Breaks Silence on $600M ADA Scandal

6h ago•

bullish:

bearish:

Charles Hoskinson, the founder of Cardano and CEO of IOG, has come forward to address accusations that IOG used ADA from unclaimed pre-sale wallets.

On May 18, Charles Hoskinson shared a post where he called the scandal deeply personal and admitted that it has affected his relationship with the Cardano community. He added:

“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.”

The one advantage in a crisis or an event that tests people is that you rapidly get to see who your friends truly are and who's fairweather. I'd like to thank all the support and kind words both privately and publicly.

The downside is that I believe there will be a cold…

— Charles Hoskinson (@IOHK_Charles) May 18, 2025

Hoskinson Defends Protocol’s Redemption Process

Charles Hoskinson Denies Misuse of 318 Million ADA

The problem emerged after X user Masato Alexander claimed that the December 2020 update moved unredeemed UTxOs to reserve addresses on Cardano. Alexander claimed that another type of transaction, a Move Instantaneous Rewards (MIR), transferred the money to new voucher holders without letting the original ones know anything.

In 2021, Charles Hoskinson unilaterally used his genesis keys to REWRITE the Cardano ledger and take control of ₳318m ($619m)

By comparison, when the DAO hack happened in 2016, the Ethereum community forked over $60m.

One of the largest ledger reorgs in blockchain history: 🧵

— masato_alexander (@masatoalexander) May 7, 2025

Hoskinson said that over 99.8% of the ADA created during the 2017 Token Generation Event had been redeemed. The final 0.2% was taken back as per the rules, after the seven-year redemption window finished and was donated to Intersect to support Cardano ecosystem governance.

Hoskinson Plans Legal Response to Misinformation

However, Alexander disagreed with this idea and referred to a comment from Intersect’s interim executive director indicating $7 million in 2024 donations versus the roughly $600 million unclaimed ADA. He also brought attention to the missing proof of where funds were transferred.

Hoskinson, who commented on the claims back on May 7, indicated that an independent audit is being released that covers the fund’s full redemption and cash flow.

He also mentioned that IOG might initiate legal proceedings against anyone they believe has been spreading so-called “defamatory misinformation.” Following the public release of the audit, Hoskinson will let a media team take over management of his social media account.

For all those dogpiling on IOG about the unclaimed vouchers, the TGE entity is in the last stages of the redemption process since the final buyer is nearly through with his claim. After this process has concluded, the final act of the TGE will be to issue an externally audited…

— Charles Hoskinson (@IOHK_Charles) May 7, 2025

Cardano Foundation Supports Call for Full Audit

After the scandal came out, the Cardano Foundation announced on May 19 that it has nothing to do with IOG’s redemption of ADA vouchers from 2021 onwards. While the foundation acknowledged being informed of general happenings, it stated it did not inspect the details of the charity’s finances. The foundation clarified:

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

It supported the call for an independent audit and pointed out that IOG must provide all data about and any returns from, MIR transactions and balances.

Over the past few weeks, there have been many questions about the ada voucher redemption process run by @InputOutputHK after 2021.

Here’s what we know:

✅The effort to locate and support remaining voucher holders has been led by the IO team over the past four years, with no…

— Cardano Foundation (@Cardano_CF) May 19, 2025

KYC and Campaigns Used to Redeem Vouchers

Emurgo which represents the business side of Cardano, also approved of IOG’s decision. Most importantly, they stressed that it took many years, required third-party examinations in Japan, KYC verifications and the execution of several campaigns to reach the original investors. Emurgo said:

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

Cardano Faces Growing Divide Amid Allegations

Charles Hoskinson Denies Misuse of 318 Million ADA

According to the company, because of the Shelley hard fork, the unredeemed tokens were locked, so the new move to their platform allows users to redeem them in the future. Emurgo called out the use of excessive FUD, pointing out that it has led to unfounded disruption among Cardano community members.

Before the promised audit arrives, it seems the divide between Cardano’s leaders and its supporters is growing. It is hoped that the investigation’s results will help restore faith in the company, though the outcome may instead create more problems.

Conclusion

As the Cardano community awaits the results of the promised audit, tensions continue to rise between project leaders and supporters. Even though Hoskinson and IOG see their actions as justified and clear, the issue is still making people concerned. It’s uncertain if this controversy can truly be put behind us in the weeks to come.