Cardano (ADA) Hit by Governance Woes as IOHK, Emurgo Chairs Split with Cardano Foundation

The Cardano Foundation has failed to fulfill its duties and responsibilities, according to the chairs of IOHK and Emurgo.

Cardano (ADA), the ninth largest cryptocurrency ecosystem by market capitalization, has experienced a major leadership shakeup, with the chairs of IOHK and Emurgo taking their leave. Along with the Cardano Foundation, IOHK and Emurgo are the governing bodies of the project. Their respective leaders, Charles Hoskinson and Ken Kodama, published an open letter on Friday, informing the community they were parting ways with the Cardano Foundation due to its “lack of performance.”

“For more than two years there has been great frustration in the Cardano community and ecosystem. This has been caused by a lack of activity and progress on the assigned responsibilities of the Cardano Foundation and its council. Furthermore, there has been no clear indication of improvement, despite many fruitless attempts and approaches to the Foundation’s chairman and council to change this,” the joint statement read.

Hoskinson and Kodama went on to provide a thorough explanation of their decision, listing the exact areas in which the Foundation had failed to deliver on its responsibilities and duties. They mentioned a lack of strategic vision, clear financial plan, and transparency in the firm’s operations, absence of a meaningful internal governance system and appropriate action by the board, as well as а potential conflict of interest.

In a lengthy section of the letter, the authors hinted at a power struggle between the leading bodies, accusing the Foundation of “material misrepresentations and wrongful statements,” including a claim that it owned the trademark in Cardano.

As part of their proposed measures, Hoskinson and Kodama called on the Foundation to “voluntarily subject itself to the Swiss authorities” for a complete audit of all of its financial transactions. The duo also noted that while IOHK and Emurgo cannot force the Foundation’s chairman Michael Parsons to resign, they hope he will voluntarily do so in order to “avoid the Foundation continuing to be an ineffective entity.”

Aiding IOHK and Emurgo in their mission to oust Parsons are Cardano community members who have launched an online petition.

Furthermore, Hoskinson and Kodama said their companies “are committed” to stepping in and taking over the Foundation’s responsibilities, including hiring new staff and expanding marketing efforts on behalf of the platform’s community. They also want to replace the Cardano Foundation with a “decentralized Foundation built as a DAO,” whose governance will be conducted directly on the Cardano computation layer. The proposed changes are expected to take place by 2020.

The Foundation had not yet responded to the open letter and the accusations as of the time of writing. Meanwhile, the news seems to be affecting investor sentiment in the Cardano token. ADA lost some 0.87% on Sunday, trading at $0.073. The coin’s market capitalization stands at $1.89 billion.