Cardano founder Charles Hoskinson expanded his response to allegations that Input Output Global (IOG) misappropriated over 318 million ADA from unredeemed pre-sale wallets, calling the situation deeply personal and damaging.
In a May 18 post on X, Hoskinson reflected on the reputational toll of the allegations, noting that the incident has reshaped his view of 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.”
Hoskinson added that following the release of an external audit, he intends to hand control of his social media account to a media team and scale back his direct engagement.
Legal pushback and audit plans
Hoskinson first responded to the allegations on May 7, saying that IOG may pursue legal action against those accusing him of redirecting unclaimed ADA from Cardano’s 2017 Token Generation Event.
According to a social media thread by X user Masato Alexander, a December 2020 protocol update introduced a function that reassigned ADA from unredeemed UTxOs to Cardano’s reserves.
Alexander alleged that the subsequent Move Instantaneous Rewards (MIR) transaction diverted these funds without transparency or notification to the original voucher holders.
Hoskinson countered that investors redeemed 99.8% of ADA vouchers. The remaining 0.2%, recovered under protocol rules after a seven-year window, was donated to Intersect, the Cardano industry coordination body.
He added that an externally audited report would soon document the redemption history and crowdsale process. Hoskinson also said he would “send letters to the relevant parties demanding retractions and apologies.”
Alexander disputed the claim, citing a public statement by Intersect’s interim executive director that it received only $7 million in 2024, far less than the estimated $600 million value of the disputed ADA. He also criticized the lack of a detailed audit publicly tracing the fund flows.
Foundation and Emurgo address 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 it received general updates, it did not provide detailed accounting.
The foundation stated:
“The effort to locate and support remaining voucher holders has been led by the IO team over the past four years.”
The foundation welcomed IOG’s pledge to release a third-party audit and recommended that it include all MIR transactions, balances, and any returns generated during fund administration.
Cardano’s commercial arm, Emurgo, also defended IOG’s efforts in a May 19 post. It said the seven-year redemption process involved multiple campaigns, third-party investigations in Japan, and Know Your Customer (KYC) verification.
Emurgo acknowledged:
“While the vast majority of the pre-sale ADA vouchers have been successfully redeemed, there was a small percentage that had gone unredeemed.”
The company added that the Shelley hard fork would have rendered unredeemed ADA unspendable, necessitating their movement to enable further redemptions.
The firm also expressed concern over “excessive, unwarranted FUD,” saying accusations based on limited facts caused unnecessary harm to the ecosystem. It echoed IOG’s call for an audit and urged the community to remain patient.
