Hoskinson to Audit Cardano Foundation Amid $600 Million ADA Misappropriation Allegations

The Cardano Foundation is set to release an audit report on the state of its treasury following allegations of misappropriating $600 million in ADA. 

NFT artist Masato Alexander claimed that Cardano blockchain platform founder Charles Hoskinson used a genesis key to alter the ledger and transfer 318 million ADA during the Allegra hard fork in 2021.

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

As evidence, the expert presented a transaction that initiated the protocol update and a commit on Github. 

The coins yielded 25 million ADA in staking rewards, Alexander added. Hoskinson responded to the allegations.

Because you cannot read. The vast majority of that 350 million ada was redeemed by the original buyers. It took seven years.

— Charles Hoskinson (@IOHK_Charles) May 6, 2025

“[…] The vast majority of those 350 million ADA was redeemed by the original buyers. It took seven years,” he noted.

Alexander pointed out that the genesis block of the Cardano network was created in October 2017. 

genesis block was october 2017.

how did you manage to get the “vast majority” of this 350m to its buyers after years of not being able to for years?

given that Attain (original seller) no longer existed, how did you come to decide how to use the remaining funds?

— masato_alexander (@masatoalexander) May 6, 2025

“[…] How did you manage to get the ‘vast majority’ of this 350 million to buyers after years of not being able to do so?”, he asked.

Hoskinson announced the preparation of an audit report related to the hard fork. He emphasized that he is “deeply hurt” by the community’s distrust. 

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

“If I am not given the presumption of innocence without compelling evidence to the contrary, then I do not have the connection with some people that I had hoped for. […] After the audit report is released, I will likely hand over my X account to the media team and change the format of AMA and X Spaces,” he wrote.

In May, Hoskinson announced a private stablecoin based on Cardano.