Cardano founder Charles Hoskinson announced that the Cardano Foundation will soon release an audit to counter rising accusations of financial misconduct.
The disclosure comes nearly two weeks after NFT artist Masator Alexander alleged that Hoskinson unilaterally altered the Cardano ledger to take control of 318 million ADA, worth over $600 million at the time, and failed to provide transparency on how he used the funds.
Claims of Misappropriation of $600M in ADA
Specifically, on May 6, Alexander questioned a 2021 transaction that involved the movement of 350 million ADA, plus an additional 25 million from staking rewards, using Cardano’s genesis keys.
He claimed this action required custom code and accused Hoskinson of using it to fund Intersect. He pointed out that Intersect reportedly spent less than $10 million in its first year, questioning what happened to the rest of the money.
Robert, a Cardano supporter, noted that the original 350 million ADA had been allocated nearly five years ago and contributed to infrastructure advancements like decentralized staking, Hydra, and Bitcoin interoperability.
In response, Alexander stated that Input-Output Global (IOG) originally received 2.4 billion ADA during the genesis event, and the 350 million ADA transaction occurred years later in 2021. He insisted that special access was used to move unclaimed ICO funds into reserves controlled by Hoskinson and IOG.
However, Hoskinson denied these claims, stating that the original buyers had already redeemed most of the 350 million ADA and used the remaining forfeited funds to seed Intersect.
IOG never gave itself 350 million unclaimed ada. This is a lie. The vast majority was claimed and the remaining that was forfeited after seven years of waiting was donated to Intersect. Intersect was funded the same way and by the same TGE that funded the CF.
No matter how many…
— Charles Hoskinson (@IOHK_Charles) May 6, 2025
Further Details
Meanwhile, on May 7, Alexander released a detailed thread on X. He alleged that the 2021 “Allegra” hard fork included hidden functionality that erased ICO-related unclaimed ADA and added it to the reserves.
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
He outlined what he described as a two-step maneuver to carry this out. According to him, this first involved the sweeping of 318 million ADA into reserves via a protocol change, and second, the use of a Move Instantaneous Rewards (MIR) transaction to withdraw the funds.
Alexander questioned the legitimacy of the redemption process and challenged the lack of public accounting. He claimed that only a fraction of the ADA was ever used for Intersect. Alexander pointed to public statements by its interim executive director, Jack Briggs, who disclosed that the organization was seeded with only around $7 million.
Hoskinson Promises Audit
Amid the mounting pressure, Hoskinson took to X on May 18 to address the backlash. He announced that the Cardano Foundation would release an audit to clarify the matter.
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
He also expressed disappointment over the reactions from some in the community, saying that the ordeal revealed who his true allies were. Hoskinson stated that the situation had deeply hurt him and led him to reconsider how he would engage with the public going forward.
Further, he revealed plans to hand over his X account to a media team and change the format of his popular AMAs and public discussions.
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