Cardano Founder Charles Hoskinson Prepares Legal Action Amid ADA Audit

Cardano founder Charles Hoskinson has confirmed that an upcoming audit report will address ongoing allegations of ADA token misappropriation. The report, focused on Input Output Global’s (IOG) token management since 2021, is expected by mid-August. In parallel, Hoskinson is weighing legal action, citing reputational damage to the Cardano brand.

Hoskinson recently announced plans for a transparent audit of IOG’s ADA token holdings and transactions. He acknowledged having been given a draft copy of the audit but wanted more information before it was made public. With further improvement, the report is scheduled to be brought in by the middle of August. Hoskinson also stressed the importance of transparency, vowing to live-stream a complete reading of the audit after completing it. He also shared that the report would be posted on a special community-oriented site so that anyone in the community could see it. Nonetheless, neither IOG nor Hoskinson has yet unveiled the name of an audit firm or a law firm that facilitates the audit.

The Cardano founder stated, “I just received the first copy of the audit report. I asked way more information and background.” Although the move was received positively by members of many parts of the community, some people are still undecided and would want to await independent confirmation. The Chief Legal Officer at IOG, Joel Telpner, did not probe further and simply confirmed the timeline.

Amid preparations for the audit’s release, the Cardano founder is meeting defamation lawyers regarding accusations from earlier this year. In May, anonymous sources alleged that Hoskinson misappropriated 350 million unclaimed ADA tokens. He denied the charges and expressed emotional distress over the incident. Now, Hoskinson argues that the allegations have severely harmed the Cardano ecosystem’s public image and brand value. “Hundreds of millions of dollars in brand damage have occurred,” he claimed in a recent post on X. He hinted at the possibility of a lawsuit in the near future but provided no confirmed details.

But it concerns the members of some communities that legal retribution may serve to jumpstart unwanted interest by the media. Skeptics fear that the lawsuit may move the development of blockchain into internal controversy. Still, Hoskinson claims that the reputation of the project is his first priority.

Amid this controversy, Cardano has proven its toughness, price-wise, and institutional affirmation. After Hoskinson’s post, ADA surged 4.19% to trade at $0.86, reflecting a broader crypto market rally. After the news of the transparency measures, analysts noticed a new interest in investors. Coinbase recently introduced wrapped ADA on its Base network, aiming to expand Cardano’s presence in the DeFi space. This came after a successful Leios upgrade that enhanced the scalability and throughput on the blockchain. Such technological developments still appeal to institutional developers to Cardano.

The Cardano founder remains optimistic that the audit will reinforce trust and restore confidence among stakeholders. With transparency as its central message, IOG aims to stabilise its relationship with the rest of the crypto community. With the August deadline in mind, everyone is still waiting to see the full audit release.