Cardano Founder Faces Fraud Allegations Over $619 Million Transfer

Cardano, a prominent blockchain platform, and its founder Charles Hoskinson have recently faced severe allegations of fraud. The controversy began when an individual known as Masato Alexander posted on X, claiming that 318 million ADA, valued at $619 million, had been illegally transferred. The allegations suggest that during the Allegra Hard Fork in 2021, Hoskinson deployed code with an additional payload, allowing him to erase the original ICO UTxOs and move the funds to Cardano reserves controlled by private keys linked to him.

Alexander's claims allege that the transaction was executed through an MIR (Move Instantaneous Reward) transaction, which facilitated the movement of funds from reserves for treasury and staking rewards. These accusations quickly gained traction within the Cardano community, prompting Hoskinson to respond. He clarified that the ADA vouchers of users whose ADA were allegedly moved had become unspendable after the hard fork and were subsequently moved to a custodial account controlled by the TGE (Token Generation Event). This account continued redemption for three more years to distribute the genesis funds to the original buyers. Hoskinson also threatened legal action against Alexander if the claims persisted.

In a subsequent response, Hoskinson addressed the community's swift condemnation and the lack of support from friends during this period. He announced plans for a full audit and the publication of a report for public scrutiny. Additionally, Hoskinson revealed that the recent events would alter his engagement with the community. While he intends to continue attending events and interacting with supporters, he plans to hand over his X account to a media company. Furthermore, he will change the format of his X Spaces and Ask Me Anything (AMAs) sessions, citing the need to limit "infinite accessibility" to prevent similar incidents in the future.