Cardano Faces $600M Audit Amid Token Misuse Allegations

Cardano is under intense scrutiny after founder Charles Hoskinson announced a full audit of Input Output Global (IOG), the company behind the blockchain, in response to allegations of misappropriating over $600 million worth of ADA tokens. The decision comes as Cardano's credibility is tested by accusations from within its own community.

The controversy centers on 318 million ADA tokens left unclaimed after Cardano’s 2017 ICO. Following the network's shift to decentralization with the Shelley upgrade in 2020, these tokens became unspendable. IOG reportedly moved the tokens during the upgrade process to ensure technical continuity, but the move sparked backlash from community members who viewed it as financial misconduct.

Hoskinson has firmly denied any wrongdoing and described the accusations as personal attacks. In a post on X, he emphasized the need for a transparent investigation and revealed that a comprehensive audit of IOG is underway. The audit aims to clarify the status and handling of the unclaimed tokens and to rebuild trust in the Cardano ecosystem.

Leading the audit are major firms: BDO International will oversee the financial side, McDermott Will & Emery will handle legal oversight, and an unnamed crypto analytics firm will provide documentation to ensure public transparency. Despite the gravity of the situation, no timeline for the audit’s findings has been confirmed.

Hoskinson, visibly affected by the backlash, has indicated he may step back from his public presence, potentially handing control of his social media to a team. He has taken similar steps in past controversies, including one involving the WALDE meme coin.

Beyond the internal drama, this case underscores broader questions facing the crypto industry: How should unclaimed ICO funds be managed? And what standards of transparency must blockchain foundations meet to maintain public trust?

The outcome of this audit could prove pivotal not just for Cardano, but for how the crypto world addresses governance and accountability in an increasingly decentralized future.