Cardano founder Charles Hoskinson has alleged that he walked away from a potential deal to implement Cardano in El Salvador in 2021, citing concerns over the governments plan to airdrop cryptocurrency directly to citizens, including members of the notorious MS-13 gang.

In a recent interview on the Shawn Ryan Show, Hoskinson detailed a chaotic week of discussions with President Nayib Bukeles administration, claiming the proposed airdrop risked violating U.S. sanctions and drawing severe backlash from Washington.

Chaotic Encounters

Hoskinson painted a picture of disarray within the Salvadoran government during a 2021 visit to the country.

He described meetings with eccentric officials, including a Minister of Energy who declared, “The power of magma will be the destiny of El Salvador,” as plans for a geothermal-powered Bitcoin mining hub were pitched.

According to the blockchain innovator, the implementation strategies for the national adoption of BTC in El Salvador lacked structure, with officials allegedly using WhatsApp and Facebook speeches from President Bukele as informal policy guides.

“We asked, what are the compliance guidelines for adopting cryptocurrency here? [They said] ‘We don’t have any,’” Hoskinson reminisced. “Where are you getting your business requirements? They said Facebook.”

However, the pivotal issue emerged during U.S. consultations. Hoskinson claimed discussions revealed Bukele’s intent for a universal airdrop, which he argued would funnel cryptocurrency to MS-13, designated a Transnational Criminal Organization by the U.S. Office of Foreign Assets Control (OFAC).

“Bukele, for example, wanted to do an airdrop to everybody in El Salvador,” Hoskinson stated. “And were like, okay, but MS-13 is on an OFAC list. And so if we give Bitcoin to all these people, were facilitating a transfer of value to a terrorist organization. Thats no bueno.”

He also added that coordination with U.S. authorities proved impossible, particularly under the Biden administration, which he claimed adopted a regime change stance towards Bukele.

We just couldnt get there. So, we passed on the deal after a week, he concluded.

Despite the withdrawal, El Salvador pressed forward with Bitcoin, making it legal tender and launching the government-backed Chivo wallet.

Hoskinson admitted that the move was historic, with the Central American nation currently holding 6,230 BTC worth about $679 million.

“It was a very pivotal moment, He said. It actually made Bitcoin the official currency and it forced the IMF, and it forced all the transnational bodies to actually start recognizing Bitcoin.”

Market Reaction

The explosive claims elicited swift skepticism, with Bitcoin advocate Cory Bates questioning the narratives accuracy:

I have a feeling this is not quite how the story went.

Pseudonymous analyst The Bitcoin Therapist was more blunt, calling it the dumbest sh*t I’ve ever heard.

Neither Bukeles administration nor U.S. officials have publicly verified Hoskinsons account.

Meanwhile, Cardanos native ADA token is showing modest resilience. At the time of this writing, it was trading at $0.5768, up 2.0% in the last seven days to slightly outperform the broader crypto market.

However, it remains down 12.5% over the last month and significantly lags its September 2021 all-time high of $3.09.