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Cardano founder Charles Hoskinson is preparing to pursue legal action following accusations that he manipulated the blockchain to seize 318 million ADA tokens from early investors.
Author: Sahil Thakur
Cardano founder Charles Hoskinson is preparing to pursue legal action following accusations that he manipulated the blockchain to seize 318 million ADA tokens from early investors.
The allegations surfaced last week on social media platform X, where NFT artist Masato Alexander claimed that the Allegra hard fork in 2021 altered the status of original ADA allocations.
According to Alexander, the Allegra upgrade included an undisclosed payload that caused the Cardano network to overwrite unspent token allocations from the initial coin offering (ICO). These tokens were allegedly moved into the Cardano treasury without investor consent.
“In 2021, the Allegra hard fork effectively erased the original ICO UTxOs holding the ₳318 million and swept the funds into the Cardano reserves,” Alexander wrote.
He claimed that the intention was to redistribute the tokens, but a significant portion was never returned. Instead, Alexander alleges the funds were staked to generate an additional 25 million ADA in rewards.
Only a small amount of the tokens, he said, were used to support Intersect, a Cardano governance initiative.
Hoskinson publicly refuted the claims, calling them “lies” and categorically denying any misuse of investor funds. He stated that the affected ADA tokens became unspendable after the hard fork and were moved to a custodial account managed by the Token Generation Event (TGE) team.
“The ADA vouchers became unspendable after the hard fork,” he explained. “They were rolled into a custodial account controlled by the TGE that then continued redemption for three more years.”
He added that 99.8% of the ICO tokens were eventually claimed by original investors. The remaining 0.2% was returned to the TGE and allocated to Intersect, following the same model used to fund the Cardano Foundation.
Hoskinson emphasized that no technical exploit or blockchain manipulation took place. He also mentioned that the is still ongoing.
Hoskinson warned that he and his company, Input Output Global (IOG), may sue Alexander and anyone else repeating the allegations.
“As we are now considering litigation against those slandering us, we will make no further statements until the closing report is published,” he wrote. “We will then send letters to the relevant parties demanding retractions and apologies.”
The Cardano community awaits a public redemption report from the TGE team. For now, Hoskinson maintains that the process was transparent, that nearly all tokens were properly redeemed, and that Intersect’s funding was within the expected limits.
No court filings have been confirmed yet, and Alexander has not responded to the legal threat publicly.
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