Cardano’s Hoskinson calls for ‘vote of no confidence’ amid $600M ADA scandal

Key Takeaways 

Charles Hoskinson called for the dissolution of the Cardano Foundation. Will ADA sentiment suffer amid the chaos? 

The Cardano[ADA] community may face division after ADA’s $600 million theft allegation took another twist. 

In a recent X (formerly Twitter) space, the chain’s founder, Charles Hoskinson, expressed frustration with the Cardano Foundation (CF) for ‘ruining the integrity’ of the ecosystem. 

He added,

“At some point, we, as the ecosystem, have to hold them (CF) accountable. An info action with a vote of no confidence, maybe a class action suit with the Swiss government to get them to vacate the board.”

Hoskinson said that the CF’s funds can be donated to the Cardano treasury or another organization that can support the ecosystem. 

Will the stand-off affect ADA?

So, why is the update crucial for the community and ADA?

Well, Hoskinson and early insiders were blamed for the misappropriation of over 300 million ADA tokens (worth over $600M based on ADA prices at the time the story hit headlines). 

According to Hoskinson, the allegations were being spread by Cardano Foundation employees and affected the ‘integrity’ of the ecosystem. 

In response, he instructed an independent audit to verify the claims. The report, released recently, exonerated him and insiders, stating that, 

“The investigation determined that each of the allegations related to the topics of investigation does not have any basis.” 

The report added that some of the unredeemed ADA from early investors were directed to a trust fund (Intersect) that helped oversee Cardano’s roadmap.

Intersect had two founding members: Input Output and EMURGO, but both contributed capital to fund the project’s roadmap. 

This could help clear the allegations that Hoskinson and other insiders stole $600 million. 

However, his hard stance on the Cardano Foundation for spreading the theft rumors and failing to fund the audit could divide the community further. 

And amid the chaos, ADA’s market sentiment could be impacted. Already, the altcoin’s sentiment had dropped to fear levels, per Santiment data. 

“Cardano has quietly seen its normally optimistic crowd start to turn bearish.”

But the on-chain analytics added that prices tend to go opposite the crowd’s expectation, implying that ADA could see a recovery soon. 

On the 1-month liquidation heatmap, the Q3 pullback hunted for liquidity pools. There were extra clusters at $0.8 and $0.76 on the lower side.

On the upside, $0.85 and $0.90 were also key magnetic zones that could attract price action.