Editor’s Note (22 May 2025): Since the publication of this article, IOHK (Input Output Global) has responded to the controversy with more information about the ADA redemption program and announced an independent audit. You can read IOHK’s full statement here. The audit is being conducted by McDermott Will & Emery and BDO.
- Speculation continues on social media about whether Hoskinson accessed wealth through alternative financial methods rather than direct ADA sales.
- Allegations suggest he may have used exchange-traded products (ETPs) to convert ADA into cash while avoiding spot market sales.
- The community awaits results from an independent audit while debates about the management of Cardano’s funds persist.
Charles Hoskinson, founder of Cardano (ADA), has denied allegations that he used approximately $500 million worth of ADA from a community-controlled fund for personal purposes. The claims have stirred continued distrust among some community members, who are demanding transparent answers.
Hoskinson stated he will undergo a full audit of Input Output Global (IOG) and has also allowed researchers to access his social media channels while the situation is investigated.
By Tuesday afternoon, he announced on X (formerly Twitter) that he would take a break from the platform, directing all questions to his legal counsel.
Questions remain around what some online users are calling the “redemption scandal” which centers on the movement of 318 million ADA tokens. Critics have speculated that Hoskinson may have converted ADA into cash through financial products known as ETPs (exchange-traded products), rather than selling directly on the open market.
According to this theory, large holders could transfer ADA to asset managers, who then create ETP shares backed by those tokens. These shares can then be redeemed for cash by investors or the original contributors.
This would technically avoid direct spot market sales, but still provide access to liquidity. Market watchers note that “accredited investors with substantial holdings often have the ability to redeem shares for cash-in-lieu” depending on how the ETP is structured and regulated.
Several ADA-focused ETPs exist globally, including:
- 21Shares Cardano ETP
- CoinShares Physical Staked Cardano
- WisdomTree Physical Cardano
- Bitwise Physical Cardano ETP
- Wave ADA Yield Fund
- Valour Cardano ETP
There is no public confirmation that any of these funds received ADA from Hoskinson, his companies, or related parties.
Hoskinson maintains his support for Cardano and says he has not needed to sell ADA to support his lifestyle. He described reports about mismanaged funds as “maximally viral clickbait.”
The current audit is being conducted by the accounting firm BDO and the law firm McDermott Will & Emery.
IOHK Responds
In response to the recent speculation, IOHK released a detailed statement explaining the history and purpose of the ADA redemption program. According to the statement, between 2015 and 2017, ADA vouchers were sold across Asia to fund Cardano’s early development. Nearly all of these vouchers—about 99%—have now been redeemed by their original buyers.
The redemption process originally took place via the Daedalus wallet but later moved off-chain in 2021 for security reasons. IOHK states that this off-chain process was carefully managed, independently audited, and supported by both the Cardano Foundation and EMURGO.
To complete the process, IOHK hired multiple legal and private investigation firms to help locate and contact remaining claimants. They say eligible participants were verified using Know Your Customer (KYC) rules and received help to recover their ADA.
IOHK emphasized that transparency had to be balanced with security, especially to avoid scams and social engineering attempts. They say full details will be published soon in a closing report, which will cover on-chain and off-chain ADA activity, audit records, and more.
They have hired McDermott Will & Emery—an internationally recognized crypto-focused law firm – and global accounting firm BDO to complete the final audit. IOHK also noted that legal action may be taken against those spreading knowingly false or defamatory claims.
The Cardano community now waits for the audit results, as discussions continue over how the project’s financial systems have been managed and communicated to the public.
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