Source: Ambcrypto, originally published on .
A massive twist occurred in the story of the 9th largest cryptocurrency ecosystem, Cardano [ADA] this week. On 12th October, Charles Hoskinson, the Founder of Cardano’s parent company InputOutput released a video update where he informed the community about IOHK departing from the Cardano Foundation [CF]. He also conveyed that IOHK and Emurgo, the venture capital arm for Cardano are together going to carry the ecosystem forward, without Cardano Foundation.
Regarding the role of the Cardano Foundation, the IOHK CEO explained that it was brought into the picture to handle the aspects of the projects that bridge the gap between the tech and the venture arm. Some of the main roles of CF included managing the meetup groups, providing timely and accurate information to the community, carrying out regulatory outreach, among others. In his words:
“…things like procuring the trademarks, things like regulatory outreach, for example, a large percentage of the initial ADA distribution was in Japan and getting listed on the Japanese exchange seems to require a great degree of regulatory lobbying and pushing so this was the duty of the Cardino foundation amongst others.”
He further discussed how Michael Parsons, the Chairman of the CF board did not comply with business ethics and promoted nepotism in the placement of the board members. According to Hoskinson, Parsons was supposed to act as a community ambassador without heading the operations.
However, after a considerable wait, IOHK did not see any diversity in the board, with traces of nepotism. Apart from these issues, the CF was not seen to have executed any of its core responsibilities, Hoskinson revealed. He then stated:
“As the months came by and our relationship continued to strain, it became very clear to IOHK and Emurgo that we’re probably not going to effectively work with the foundation the way it’s structured. So what we decided to do was to gradually take upon ourselves more of the foundation’s duties.”
During the video, Hoskinson also clarified that one of the goals while working on the Cardano project was to distribute and balance the power across the ecosystem. He said that the concentration of power and responsibilities in one entity can lead to a resistance against decentralization. He cited:
“So traditionally when cryptocurrency is launched there is a central foundation and that foundation is responsible for issuing a token for community, management,, exchange listing the construction of the cryptocurrency and business development as well as encouraging people to build on top of the protocol. This approach is that there’s just simply too much power and responsibility in one entity.”
Ken Kodama of Emurgo along with Charles Hoskinson also published a joint open letter to CF’s Michael Parson wherein the parties have left a challenging and investigatory note to the Chairman. The letter posed some of the tough questions at the CF authority regarding the nepotism and performance of the foundation.
The letter also revealed that many of the claims made by the organization regarding the utilization of funds fetched from the Cardano ICO were superficial in nature. This was found by IOHK and Emurgo after investigating the papers published by CF on the matter.
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