Cardano’s ADA cryptocurrency is currently facing significant volatility, with a recent price decline of 16% drawing attention to a resurfacing controversy.
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Cardano announced the ADA redemption audit will be undertaken by a reputable third-party firm.
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The pullback of ADA has sparked intense dialogue regarding the 2021 ‘redemption scandal.’
The shadow of the 318 million Cardano [ADA] ‘redemption scandal’ from back in 2021 resurfaced over the weekend, igniting heated debate.
However, some of the claims linked the scandal to money laundering, forcing Cardano’s legal chief, Joel Telpner, to issue a warning. He said,
“But when statements cross the line and become defamation, they should not and will not be ignored.”
ADA’s ‘redemption’ saga
The alleged scandal hit crypto headlines in early May and implicated Cardano founder Charles Hoskinson.
According to these claims, the 318 million ADA unclaimed funds were from early, unresponsive ICO (initial coin offering) participants. However, some allege the funds were reportedly repurposed for other uses, raising the ‘scamming’ claims.
For his part, Hoskinson dismissed these allegations. The Cardano team absolved itself from any wrongdoing, clarifying that it exhausted all avenues to reach out to the participants.
According to Daniel Tetsuyama, one of the Cardano figures involved, the unredeemed funds were reallocated as per regulations and not ‘stolen’ as alleged.
Source: Daniel Tetsuyama/X
On the contrary, some critics believe the ICO participants were short-changed and should be reimbursed.
To clear the speculation and set the record straight, Telpner noted that an independent audit will be conducted.
“There will be an audit conducted by independent third parties, whose findings will be made public. As a result, we know that this ongoing speculation on the ADA redemption process will, by necessity, give way to independently verified facts.”
Here, it’s worth noting that the debate was marked by a slight decline in Open Interest (OI) below $400 million. This hinted at a reduced appetite for speculative interest in ADA on the Futures market.
Additionally, the spot CVD (Cumulative Volume Delta) fell, reflecting decreasing demand in the spot market over the weekend. Collectively, this signaled a slight cool-off from its recent rally.
Source: Coinalyze
On the price charts, ADA retreated by 16% from its recent high of $0.86 after facing rejection at the upper range of the downtrend channel. However, the drop to $0.76 was still a higher low, and the price action was above short-term moving averages.
This can be seen as a sign of short-term strength. However, bulls can only be out of the woods if ADA decisively moves above $0.85.
Source: ADA/USDT, TradingView
Conclusion
Amidst market fluctuations and intense scrutiny, Cardano’s ADA is navigating a challenging landscape. The independent audit will be critical in dispelling rumors and confirming the integrity of the redemption process. As stakeholders await further developments, the price action and demand metrics will significantly indicate the future trajectory of ADA.
