Cardano’s Charles Hoskinson Accused of Seizing $619M in ADA—He Says It Was Protocol, Not Theft

Cardano founder Charles Hoskinson has rejected claims that he secretly rewrote the blockchain’s rules to take control of ₳318 million ADA (worth around $619 million at the time). The allegations came from a crypto user named Masato Alexander on X who said Hoskinson misused special keys during a protocol upgrade in 2021. At the center of the issue are ADA tokens left unclaimed after Cardano’s initial coin offering (ICO). According to Alexander, a code update in the 2021 “Allegra” hard fork allowed Cardano developers to use a function called returnRedeemAddrsToReserves to sweep these tokens, worth hundreds of millions, into Cardano’s reserve. Critics argue this action removed the tokens from the original investors, many of whom were Japanese users who never redeemed them. The claim further says the funds were later moved using a type of transaction called MIR (Move Instantaneous Rewards), which usually distributes staking rewards or treasury payments. But in this case, it allegedly sent the ADA into a centralized account under Hoskinson’s control. Charles Hoskinson Denies Hijacking ICO Funds, Calls Allegations ‘Defamatory’ Hoskinson strongly denied these accusations. He explained that the ADA vouchers had expired and become unspendable. The funds were then placed in a custodial account to allow further distribution to legitimate buyers. He stressed that the action was part of Cardano’s protocol and not an unauthorized ledger rewrite. He also warned that if Masato Alexander continued to accuse him of theft, legal action would follow. Hoskinson confirmed that he issued a cease-and-desist notice against Masato Alexander. Masato Alexander has continued to push back, claiming he has insider sources within Hoskinson’s team. He has demanded full records of how the ₳318 million ADA was used, including what was spent on development and what remained. Charles Hoskinson responded that a portion of the funds went to Intersect, a Cardano-related governance body. He said this included ₳350 million ADA and an additional ₳25 million earned from staking. However, Intersect’s interim leader, Jack Briggs, reported the organization only received $7 million in 2024, creating more questions about where the rest of the funds went. Legal Action and Audit Report in Progress In a new update posted on X on May 8, Hoskinson revealed that the Token Generation Entity (TGE), which oversaw the original distribution, is finalizing the redemption process and preparing an externally audited report. The audit will trace the full history of token allocations, from the initial crowdsale to the final distribution. Hoskinson criticized those spreading the allegations, calling the claims defamatory and factually incorrect. He emphasized that Attain—the vendor initially responsible for distributing ADA vouchers—went out of business, and the Cardano Foundation declined to assume control of the redemption, leading to delays and complications. Despite these setbacks, he maintains that 99.8% of all vouchers were redeemed correctly. You May Also Like: Cardano’s Charles Hoskinson Predicts Ethereum Will Die in 10–15 Years