Cardano's Hoskinson Counters Allegations of Blockchain Manipulation Over 318 Million ADA Tokens

He asserts that the unclaimed tokens were secured in a custodial account, and an impressive 99.8% of the ICO funds have been redeemed by legitimate token holders.

Cardano founder Charles Hoskinson has defended himself against claims that he mishandled 318 million ADA tokens during the 2021 Allegra hard fork.

Last week, NFT artist Masato Alexander asserted that the Cardano "Allegra" hard fork involved a deliberate overwriting of unspent token allocations from the original token sale, redirecting those assets to Cardano's reserves.

"In 2021, the Cardano 'Allegra' Hard Fork (HF) wasn't just a routine upgrade. It contained an extra payload. This HF effectively ERASED the original ICO UTxOs holding the 318M and swept the funds into the Cardano reserves," Alexander stated.

According to Alexander, although there were intentions to reissue the funds to their rightful owners, a large portion of the ADA tokens were withheld.

Further allegations indicate that only a fraction of the tokens contributed to Intersect, a Cardano governance initiative, while most of the funds were staked, purportedly yielding an estimated 25 million ADA in additional rewards.

"Only a tiny fraction went to Intersect... Where did the VAST majority of that 318 MILLION actually go after being moved from reserves? Separately, the funds were staked, earning 25m additional," claimed Alexander.

Additionally, Alexander criticized the lack of documentation regarding the fund's movement, hinting at a concerning absence of a verifiable audit trail.

In an ironic twist, Hoskinson had recently emphasized the need for community participation in scaling solutions, highlighting the significance of governance.

"Yet, when 318M was at stake, he acted unilaterally via genesis keys to alter the ledger and control these funds," remarked Alexander.

However, in a statement on X, Hoskinson branded these claims as "lies."

He asserted that the ADA vouchers became unspendable following the Allegra hard fork, and were rolled into a custodial account.

"The Ada vouchers became unspendable after the hard fork. They were rolled into a custodial account controlled by the TGE that then continued redemption for 3 more years to distribute the genesis funds to the original buyers."

According to Hoskinson, original buyers were able to claim 99.8 percent of the ADA distributed during the ICO, while only 0.2 percent of the tokens went to fund Intersect.

"After seven years, the remaining 0.2 percent were returned to the TGE and donated to Intersect through the same process that funded the Cardano Foundation."

While a comprehensive report from the Cardano team is yet to be released, Hoskinson noted that the process continues, and the remaining funds will be directed to Intersect.

He added that legal action could be forthcoming against Alexander and others who are perpetuating what he terms as a false narrative.

"We are now considering litigation against those slandering us, and we will make no further statements until the closing report is published. We will then send letters to the relevant parties demanding retractions and apologies," Hoskinson concluded.