Cardano Founder Threatens Lawsuit Over Token Manipulation Allegations
A wave of online allegations has placed Cardano founder Charles Hoskinson at the center of controversy, prompting him to respond forcefully and hint at upcoming legal action.
The accusations stem from posts on social media platform X, where digital artist Masato Alexander claimed that Hoskinson and the Cardano development team used a past protocol upgrade to quietly seize 318 million ADA tokens. The claims suggest that the 2021 “Allegra” hard fork included hidden code that redirected unspent tokens—originally tied to Cardano’s initial coin offering—into the project’s reserves.
Alexander argues that while a portion of the tokens was eventually redistributed, a large chunk allegedly remained unaccounted for. He accused the team of staking these funds to earn millions in ADA rewards and criticized the lack of transparency, noting the absence of a clear audit trail.
In response, Hoskinson flatly rejected the accusations, labeling them as “lies” and misinformation. He explained that after the Allegra upgrade, the tokens in question became inaccessible through standard means and were placed into a custodial account managed by the Token Generation Event (TGE). This account, he stated, was responsible for continuing token redemptions for eligible participants over the following three years.
According to Hoskinson, 99.8% of ADA from the original ICO was eventually claimed by its rightful recipients, with the remaining 0.2% later returned to the TGE and donated to Intersect—a governance initiative also supported by the Cardano Foundation.
He acknowledged that the final report on the redemption process has yet to be released but emphasized that the vast majority of tokens were properly distributed. Until the official documentation is made public, he announced that no further statements would be issued.
However, Hoskinson made one point clear: if the accusations continue, legal action will follow. “We are now considering litigation,” he stated, adding that retraction letters would be sent to those who persist in repeating what he describes as defamatory claims.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
