Cardano founder Charles Hoskinson has denied allegations that he used Genesis keys to seize 318 million ADA tokens during the Allegra hard fork in 2021.
He said the tokens were moved to a custodial account for ICO distribution and not taken by the Cardano team.
The accusations surfaced on X last week. NFT artist Masato Alexander claimed that Cardano altered the blockchain during the Allegra hard fork. He said the network erased original ADA vouchers and rerouted them to Cardano reserves.
Alexander wrote,
“This HF effectively ERASED the original ICO UTxOs holding the ₳318M and swept the funds into the Cardano reserves.”
He alleged that the team planned to reissue the funds but withheld most of them and used some to stake and generate an estimated 25 million ADA in rewards.
Hoskinson Explains Redemption and Use of Custodial Account
“The Ada vouchers became unspendable after the hard fork. They were rolled into a custodial account controlled by the TGE that then continued redemption for 3 more years to distribute the genesis funds to the original buyers.”
The ICO distribution process remains active as of May 2025, although it is now nearing completion. The final buyer is currently completing his redemption. Once he finalizes the process, the TGE will issue an externally audited report. This report will cover the entire Cardano ICO redemption history. The TGE will then share it with the founding entities and Intersect, which operates as a Cardano governance body.
Hoskinson confirmed that original buyers had already redeemed 99.8% of all ADA sold during the ICO. He stated that the TGE returned the remaining 0.2% and donated it to Intersect. The team followed the same mechanism used to fund the Cardano Foundation. He explained that the entire process followed the official redemption protocol.
The redemption delays, according to Hoskinson, were caused by multiple issues. First, the company Attain, which had served as the sole vendor of ADA vouchers, went out of business. Second, the Cardano Foundation, under its earlier leadership, refused to take over redemption duties after the protocol launched in 2017, despite having audited the original sale. These developments forced IOG to extend the redemption window and maintain operations for several more years.
He added that the TGE had to legally wait seven years before recalling unclaimed ADA. That period is now ending, and the final audit report will soon be published. Until then, Hoskinson confirmed there would be no further statements from IOG on the matter.
“Many people at IOG have spent years of their lives, thanklessly, on this program. I will make sure their hard work is broadcast and give the critics one opportunity to apologize and retract their statements after the report is published.”
If false claims continue, Hoskinson said Input Output Global will pursue legal action.
“Should they continue to assert that IOG stole funds, we will pursue legal action,” he warned.
The upcoming report is expected to clarify the complete trail of the Cardano ICO, including all ADA voucher redemptions, Cardano reserves, and the final transfer to Intersect.
Cardano Founder Plans Legal Action Against Public Claims
Masato Alexander raised further concerns. He claimed that the tokens meant for early investors were mostly staked, generating additional ADA rewards. He also criticized the Cardano team for lacking documentation and transparency.
“Only a tiny fraction went to Intersect,” Alexander wrote.
“Where did the VAST majority of that ₳318 MILLION actually go after being moved from reserves?”
He said no full audit or traceable path was made available.
Hoskinson responded by calling the statements false. He said the team is considering legal action.
“As we are now considering litigation against those slandering us, we will make no further statements until the closing report is published,” he stated on X.
Hoskinson added that the team will send legal notices to anyone who repeats the claims. Meanwhile, Input Output Global, the company developing Cardano, has not issued a separate statement.
So far, neither party has released transaction records or internal memos. However, the community continues to debate the 318 million ADA issue. Discussions now focus on the Allegra hard fork, ADA voucher handling, and claims involving Intersect and the Cardano reserves.
Cardano Price Forms Bearish Flag After Hoskinson ADA Controversy
On May 18, 2025, Cardano (ADA) trades at $0.7560, showing signs of weakness following the fallout from the 318 million ADA seizure allegations. The controversy surrounding Charles Hoskinson and claims related to the Allegra hard fork appears to have affected investor sentiment, triggering a sharp sell-off.
Cardano has now formed a bearish flag pattern, a technical structure that often signals continuation of a prior downtrend after a temporary upward move. The pattern consists of a steep drop (the flagpole), followed by a rising parallel channel (the flag).
If confirmed, this bearish flag suggests that Cardano could fall by nearly 31% from its current level of $0.7560, targeting around $0.5112. This level marks the projected breakdown based on the height of the previous drop added below the flag support.
The daily chart shows ADA breaking below the upper channel of the flag after touching a recent high near $0.81. The price currently tests the lower trendline of the flag. A decisive breakdown could validate the bearish structure.
The Relative Strength Index (RSI), a momentum indicator, currently reads 59.11, down from its earlier peak. It suggests slowing buying pressure as ADA approaches key support. The 50-day Exponential Moving Average (EMA) sits at $0.7217, and ADA is barely holding above it. Losing this level may further confirm bearish control.
Trading volume stands at 7.35 million, lower than levels seen during the previous breakout. This weak participation adds to the bearish case. If the flag breaks to the downside, the next strong support lies around $0.51, which matches the target calculated from the pattern.
Cardano must stay above the channel’s lower boundary and the 50-day EMA to avoid deeper losses. Failing to do so may expose the asset to accelerated decline toward the $0.51 zone, representing a possible 31% drop from the current price.
The broader market reaction to Hoskinson’s legal threats and the ongoing TGE redemption report delay continues to weigh on ADA’s price trajectory.