Cardano Under Audit for Alleged ADA Manipulation: Key Developments and Preliminary Insights

Cardano's creator, Charles Hoskinson, has shared pivotal updates on the ongoing audit tied to allegations of ADA manipulation, aiming to enhance transparency throughout the process.

On July 19, 2023, Hoskinson took to X (previously known as Twitter) to inform the community, saying, “We have received the first draft of the audit report.” He added that he had requested “further details and background information for some items” within the draft. According to him, the official release of the report is slated for mid-August.

The audit follows serious allegations made in May 2023 by NFT artist Masato Alexander. Alexander accused Hoskinson and Input Output Global (IOG)—Cardano’s core development organization—of manipulating ADA funds valued at approximately $600 million back in 2021. Specifically, Alexander alleged that Hoskinson utilized a "Genesis Key" to transfer 318 million ADA from Cardano’s reserve funds to a different pool without authorization. The Genesis Key holds significant authority within the Cardano network, enabling adjustments to token allocations and network settings.

Hoskinson has categorically denied these allegations, explaining that the majority of the ADA in question originated from unclaimed tokens following a seven-year vesting period. He also clarified that the remaining ADA was subsequently allocated to Intersect, Cardano’s governance organization.

As part of his commitment to transparency, Hoskinson revealed plans to make the draft audit report publicly accessible via a dedicated website. The site will also host historical documents related to Cardano’s token sales. “I will provide a live, real-time reading of the full audit report once it is finalized,” he promised, ensuring community members can follow the findings in detail.

With the mid-August release of the final audit report, all eyes are on Cardano to see how this inquiry shapes the future narrative around one of the world’s prominent blockchain platforms.