Cardano founder Charles Hoskinson is considering initiating a community class action against people defaming the crypto project.
In an X post yesterday, Hoskinson asked Cardano stakeholders, particularly ADA holders, developers, and dApp builders, whether they would consider joining a class action against those defaming the crypto project.
He linked any potential legal action to the upcoming release of an audit report focused on the project’s 2017 initial coin offering (ICO) redemption process.
NFT Artist Accuses Hoskinson of Misappropriating ICO Funds
For context, tension has escalated within the Cardano community over the past few days. It started this week after NFT artist Masator Alexander accused Hoskinson of misappropriating 318 million ADA tokens from the 2017 ICO.
He alleged that Hoskinson and Input-Output Global (IOG) embedded hidden functionality into the 2021 Allegra hard fork that supposedly enabled them to redirect the funds, valued at $619 million then, into a reserve they controlled.
Alexander claimed that only a small portion of the funds was used to establish Intersect, a Cardano member-based organization. He further alleged that the remainder was funneled into an IOG-controlled reserve via the alleged exploit in the Allegra upgrade.
These accusations raised questions about Hoskinson’s credibility, prompting him to embrace an audit to clarify the escalating claims. As previously reported, this audit will be conducted by BDO International, a prominent accounting and auditing firm, and McDermott Will & Emery, a law firm.
The companies will provide a detailed report on their findings and reveal whether Hoskinson and the IOG misappropriated any funds linked to the ICO.
Strong Community Support for Class Action
Although it remains unclear when the report will be published, Hoskinson has teased a class action against those defaming Cardano. He created an X poll to ask Cardano community members, particularly holders, dApp builders, and developers, whether they would join this class action.
So far, the poll has attracted 10,306 votes, with 69% of these participants signaling their intentions to join the suit. The voting exercise will end in the next four days, on May 25. Based on the current poll results, most Cardano enthusiasts are willing to join the class action and seek damages from those spreading false claims.
Hoskinson has not provided more details about the potential lawsuit, including who might be included as defendants.
Hoskinson Slams Crypto Media Over Malicious Reporting
Meanwhile, the Cardano founder issued a statement expressing outrage against crypto media’s reporting following the misappropriation saga. Hoskinson suggested that most media outlets abandoned objective and fair reporting on the issue in favor of “maximally viral clickbait.”
Hoskinson emphasized that no evidence of fraud has been found and noted that all parties involved in the ICO redemption process have publicly confirmed that no wrongdoing occurred. He pointed out that no regulator, law enforcement agency, or token purchaser has raised any fraud allegations tied to the ICO.
According to him, the only accusation, referring to Alexander’s claim, came from someone without insider knowledge of the ADA sale processes.
As a result, he expressed that it is fundamentally irresponsible for media outlets to spread news with malicious headlines that hint at the possibility of massive theft.
Hoskinson described these headlines as damaging, noting that it will take several months and huge funds to repair after the audit. After the saga, Hoskinson revealed plans to reduce his social media presence.
According to him, a media team will take control of his social accounts post-audit. He also intends to change how he conducts his regular AMA sessions. However, the changes will not affect his physical meetings at crypto events.
I'm absolutely disgusted by the conduct of the Crypto Media. Any semblance of objective or fair reporting has been thrown out the window in favor of maximally viral clickbait.
The facts are that every party connected to the Ada voucher redemption has publicly stated there is no…
— Charles Hoskinson (@IOHK_Charles) May 20, 2025
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