Cardano founder Charles Hoskinson has pledged to release a full audit to counter allegations that he misappropriated over $600 million in ADA tokens. The move comes nearly two weeks after NFT artist Masator Alexander publicly accused Hoskinson of manipulating the Cardano ledger for personal and organizational gain.
On May 6, Alexander raised concerns about a 2021 transaction that transferred 350 million ADA plus 25 million ADA in staking rewards using Cardano’s genesis keys. He alleged that this transaction required custom code and accused Hoskinson of diverting the funds to support Intersect, a blockchain governance initiative.
Claims of Hidden Protocol Changes and Fund Misuse
Alexander further claimed that the 2021 “Allegra” hard fork introduced hidden functionality that erased unclaimed ADA from the ICO era and quietly moved it into reserves. According to him, this operation occurred in two phases. First, developers swept 318 million ADA into reserve accounts through a protocol change. Then, they extracted the funds using a Move Instantaneous Rewards (MIR) transaction.
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Alexander questioned both the transparency of the redemption process and the absence of a public audit. He asserted that Intersect only received a small fraction of the alleged funds. Citing Jack Briggs, Intersect’s interim executive director, Alexander noted that the group was seeded with just $7 million, raising doubts about the fate of the remaining assets.
Cardano Community Pushes Back
Cardano supporter Robert defended the 350 million ADA allocation. He argued that the funds, originally designated nearly five years ago, had helped build key infrastructure, including decentralized staking, Hydra, and Bitcoin interoperability.
However, Alexander dismissed this explanation. He pointed out that Input-Output Global (IOG) Hoskinson’s company received 2.4 billion ADA at genesis. He emphasized that the controversial 2021 transaction occurred years later and required special access to move unclaimed funds into Hoskinson’s control.
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Hoskinson Responds and Promises Transparency
Hoskinson denied the accusations and clarified that the original token buyers had already redeemed most of the 350 million ADA. He explained that the leftover, forfeited ADA funded Intersect.
To address the controversy, he took to X (formerly Twitter) on May 18 and announced that the Cardano Foundation would release a formal audit to resolve the issue. As criticism intensifies, the upcoming audit will play a key role in clarifying whether the funds were used appropriately.
With concerns around governance, transparency, and protocol-level changes, the Cardano community now awaits further evidence that could either restore confidence, or deepen skepticism around Hoskinson’s leadership.
