Cardano Faces Scrutiny Over 2021 Token Transfer
The Essentials at a Glance
Cardano is once again at the centre of controversy. The allegation concerns the improper movement of approximately 318 million ADA in 2021 – worth around 619 million USD at the time. Charles Hoskinson, co-founder of Cardano, firmly denies the accusations and is threatening legal action. The debate centres around an alleged protocol change that reportedly affected unused tokens from the early phase of the project.
What’s Behind the Allegations?
The current debate was sparked by a post from user Masato Alexander on the platform X (formerly Twitter). He claims that Cardano developers introduced a function called returnRedeemAddrsToReserves in 2021. This function allegedly identified unused ADA tokens from the Initial Coin Offering (ICO) period and transferred them to the network reserves – without reimbursement or clear communication to the affected investors.
According to Alexander, elderly Japanese investors who failed to redeem their tokens in time were particularly affected. The transaction in question was carried out using a so-called MIR transaction (Move Instantaneous Rewards). This method is typically used for staking rewards or treasury funds. Critics accuse the project of putting control of these ADA tokens into centralized hands.
Hoskinson’s Response
Charles Hoskinson publicly responded to the allegations. In a post on X, he explained that the ADA vouchers were no longer redeemable after a hard fork. The tokens were transferred to a trust account managed by the Token Generation Event (TGE). From there, the distribution continued over a period of three years.
He emphasized that no funds were stolen and announced legal action if the impression continued to be given that Input Output (IO) – the company behind Cardano – had misappropriated funds.
Counterarguments and Defence
Not all voices in the community share the criticism. Crypto analyst Jonathan Morgan defended Hoskinson and the Cardano team. He stated that there was no manipulation of the blockchain. Instead, a protocol change approved through consensus was implemented – a standard procedure within the Cardano governance model.
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According to Morgan, around 300 million ADA were successfully returned to the original ICO participants. A small remaining amount of approximately 18 to 24 million ADA was used for community development, particularly for the IntersectMBO project.
ADA Market Performance
Despite the controversy, the ADA price remains stable. At the time of publication, the price stood at 0.7052 USD – an increase of 4.39% within 24 hours. Technical indicators point to a potential trend reversal. If ADA can sustainably break through the resistance range between 0.70 and 0.80 USD, a further upward trend may follow.
Our Assessment
The allegations against Cardano and Charles Hoskinson are serious but have not yet been clearly substantiated. The Cardano co-founder’s response highlights how sensitive the issue is within the community. From a technical standpoint, the process appears to have occurred within the framework of the governance structure. Nevertheless, transparency remains crucial – especially when it comes to the use of early-stage funds in a blockchain project.
For investors, one thing is clear: the ADA price remains resilient. Anyone invested in or considering investing in Cardano should closely monitor further developments – both technically and in terms of communication. The discussion around governance and fund usage will gain importance in the future, not just for Cardano.
Sources
- CoinMarketCap
- X (formerly Twitter)
| Symbol | ADA |
| Coin type | Alt Coin |
| Transaction Speed | High |
| Pros |
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| Cons |
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| Further practical applications | |
| Price | 0.733617 |
| 24h % | 10.96 % |
| 7d % | 3.73 % |
| 30d % | 27.69 % |
| 60d % | -0.83 % |
| 1y % | 58.54 % |
| Market Cap | $26,493,932,180.00 |
| Max. Supply | 45,000,000,000.00 |
| Official Links | Website | Whitepaper | Source Code |
| Socials | Reddit | X | Message Board |
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