The $500M question: Is Hoskinson quietly profiting off unsold ADA?

Cardano (ADA) founder Charles Hoskinson recently denied rumors that he misappropriated over half a billion dollars worth of ADA from a community fund, yet doubts about his financial candor linger.

Despite the fact that he’s promised a full audit of ​​Input Output Global (IOG) and even surrendered access to his social media to researchers in the wake of the scandal, skeptics are reinvigorated.

By Tuesday afternoon, Hoskinson announced that he was taking a break from X, referring people to his lawyer.

With few answers as to what happened with the “redemption scandal” and its 318 million ADA until auditors finish their report, a new theory about Hoskinson’s clandestine wealth is circulating on social media.

With untold millions in personal wealth accessible with just a couple of mouse clicks, critics doubt Hoskinson’s claims to have sold so little ADA. Looking closely at the words of his repeated claims, they insinuate that he might have sold financial claims to ADA tokens to avoid literal spot sales.

Alleging de facto sales that avoid literal sales

According to the theory, Hoskinson could have transferred or directed the transfer of ADA to asset managers who, in turn, sell shares to retail investors of exchange-traded products (ETPs) backed by those ADA tokens.

Hoskinson, given shares of these trusts or funds as consideration for his initial ADA contributions, possibly directed the eventual redemption of those shares after third-party purchases flowed into the ETPs.

This circuitous route could have allowed Hoskinson to honestly testify that he hasn’t sold spot ADA. Instead, he might have simply redeemed shares in trusts or funds holding his unsold ADA.

Depending on the structure and jurisdiction of the ETP, accredited investors with substantial holdings often have the ability to redeem shares for cash-in-lieu, as long as they’re willing to pay transaction fees to market-makers, asset managers, brokers, and/or authorized participants.

In other words, according to the allegation, Hoskinson might have had access to cash as a redemption option for his financial claims (shares) of technically unsold ADA.