Cardano Price Dips to $0.80 Despite Hoskinson Getting Clean Chit Post Audit

An independent third-party audit cleared Cardano founder Charles Hoskinson of allegations of ADA misappropriation that surfaced in May 2025, according to a report released on Sept. 3.

The audit addressed accusations made by X user Masato Alexander on May 7, who claimed Hoskinson unilaterally used genesis keys to control 318 million ADA tokens worth $619 million at the time.

The report concluded that all fund movements were legitimate and followed proper procedures.

May Allegations Questioned Fund Movements

Alexander’s accusations centered on the 2021 Cardano “Allegra” Hard Fork, which he claimed erased original ICO UTXOs holding 318 million ADA tokens.

Alexander alleged Hoskinson swept these funds into Cardano reserves through a two-step process involving the hard fork and subsequent MIR (Move Instantaneous Rewards) transactions.

The allegations suggested Hoskinson acted unilaterally to rewrite the Cardano ledger, comparing the situation to Ethereum’s DAO hack response in 2016.

Alexander claimed the movement represented “one of the largest ledger reorgs in blockchain history.”

Hoskinson responded on May 7, stating that original buyers redeemed 99.8% of ADA vouchers over seven years.

He added that the remaining 0.2% were returned to the Token Generation Entity (TGE) after the statutory waiting period and donated to Intersect through established procedures.

Furthermore, Hoskinson warned of potential legal action against accusers, stating that IOG would pursue litigation if critics continued asserting theft allegations.

The Cardano founder also expressed personal disappointment with community members who failed to support him during the controversy.

In a May 18 post on X, he announced plans to reduce public accessibility and delegate social media management to a professional team.

Hoskinson described the allegations as defamatory, noting that IOG employees spent years working on the redemption process. He demanded retractions and apologies from critics following the audit.

The controversy prompted broader discussions about governance and transparency in blockchain projects, particularly regarding founder control over protocol-level decisions.

The Cardano Foundation distanced itself from the operational aspects of voucher redemption on May 19, noting that IOG had led the effort to locate remaining voucher holders over four years.

The foundation welcomed IOG’s pledge for third-party auditing of all MIR transactions and fund administration.

Independent Audit Validates Fund Handling

The third-party audit examined all aspects of the voucher redemption process, including fund movements, administrative procedures, and final distributions.

The report confirmed that Hoskinson and IOG followed proper protocols for handling unredeemed ADA tokens.

Auditors verified that the seven-year waiting period complied with the original sale terms and regulatory requirements.

The investigation found no evidence of unauthorized appropriation or misuse of community funds during the redemption process.

The report documented IOG’s extensive efforts to locate unredeemed voucher holders, including multiple campaigns, third-party investigations in Japan, and KYC verification processes.

These efforts spanned four years following the initial voucher sale period.

Emurgo defended IOG’s redemption efforts in a statement released on May 19, acknowledging that a small percentage of vouchers remained unredeemed despite comprehensive outreach campaigns.

The company noted that the Shelley hard fork would have rendered unredeemed ADA unspendable without intervention.

Cardano (ADA) Price Down 4%

Despite the audit’s favorable conclusions, ADA price declined 4% to $0.8045 in the 24 hours following the report’s release.

The token’s performance reflected broader market weakness rather than a specific reaction to the publication.

Trader Ali Martinez had identified key technical levels for Cardano (ADA) price potential recovery, suggesting the token might decline to $0.80 before bouncing toward $0.92.

Additionally, he shared that the TD Sequential indicator signaled a buy opportunity at the $0.81 zone.

Martinez’s chart pointed out that ADA must maintain support above $0.7850 to confirm a technical bounce.

The third-party audit provided definitive closure to allegations that had challenged Hoskinson’s reputation and Cardano’s governance practices.

However, ADA price action suggested investors remained focused on technical factors rather than fundamental vindication of the project’s leadership.