The Cardano [ADA] community is once again grappling with controversy, as founder Charles Hoskinson pushes back against resurfaced claims that he manipulated the blockchain’s ledger in 2021 to seize control of 318 million ADA — a sum valued at nearly $619 million at the time.
Hoskinson, taking to X (formerly Twitter), didn’t mince words. In a direct response to the accusations, he called the claims “outright lies” and “malicious misinformation.” He clarified that the ADA vouchers in question had become unspendable after a key hard fork, adding:
“They were rolled into a custodial account managed by the Token Generation Event (TGE), which continued redemptions for three more years to deliver the genesis tokens to the rightful original buyers.”
The Cardano architect went a step further, threatening legal action against anyone continuing to spread what he deems defamatory claims.
“If you continue to imply that IO stole funds, I will sue you. This is my last warning,” Hoskinson warned bluntly.
Where Did This All Start?
The fresh wave of allegations stems from a now-viral thread by X user Masato Alexander, who resurfaced claims first made years ago. According to Alexander, a 2021 protocol update dubbed returnRedeemAddrsToReserves redirected a massive stash of unredeemed ADA originally intended for early ICO buyers — particularly elderly Japanese investors — into Cardano’s reserves.
Critics allege that the funds were moved without adequate notice or a refund, effectively locking out legitimate holders. What’s more, they claim the funds were rerouted into a centrally controlled wallet via a Move Instantaneous Rewards (MIR) transaction — a feature normally used to allocate staking rewards and treasury payouts.
Alexander didn’t back down in the face of Hoskinson’s legal threats either, stating:
“Seriously doubt Charles wants to go through discovery. Already know where to look as half his payroll has been talking to me for years.”
Not Everyone’s Pointing Fingers
Amid the noise, some experts have spoken out in defense of Cardano and Hoskinson. Blockchain analyst Jonathan Morgan took a more technical approach, arguing that the actions taken in 2021 were part of a protocol-approved upgrade and not a secretive rewrite of the ledger.
Morgan emphasized that most of the ADA in question — around 300 million — was successfully returned to eligible participants, with the remaining 18–24 million ADA transparently repurposed for community initiatives, notably IntersectMBO, a project focused on decentralized governance.
“This wasn’t a stealth move,” Morgan said. “It was executed through protocol consensus and in line with Cardano’s governance roadmap.”
ADA Price Reacts to the Drama
Interestingly, all the controversy hasn’t scared off investors — at least not in the short term. ADA posted a 4.39% gain over the past 24 hours, trading at $0.7052 at press time, according to CoinMarketCap.
With technical indicators turning more favorable and large holders (aka whales) showing renewed interest, ADA seems poised for a potential breakout. Should the token decisively clear the resistance zone between $0.70 and $0.80, it could signal a bullish reversal and fuel further gains in the coming days.
