Ardana Labs, a stablecoin platform for the Cardano network, made headlines in 2021 when it raised $10 million from investors. The project aimed to provide a platform where investors could lock up crypto collateral and mint fiat-pegged stablecoins, including a U.S. dollar-based token called dUSD. However, Ardana Labs abruptly closed down in November 2022, citing funding and project timeline uncertainty. Many investors believed that the closure was due to the tough market conditions during the crypto winter of 2022, which saw many legitimate projects struggle to secure funding.
Now, new evidence from the Web3 risk-management platform Xerberus suggests that there may be more to the Ardana story than initially thought. According to Xerberus, Ardana executives likely transferred 80% of the project’s funds to a personal wallet, which they then used to make a series of bad crypto investments, resulting in a loss of approximately $4 million. This mismanagement of funds ultimately led to the collapse of the project.
Ardana’s rise and fall began in the summer of 2021 when the project was announced. By October of that year, it had raised $10 million from venture capital firms CFund, Three Arrows Capital (3AC), and Ascensive Assets. The project gained attention due to its successful fundraising and the involvement of prominent backers, leading investors to believe that the upcoming DANA token would deliver significant market gains. Ardana also announced a partnership with Near Protocol to create an asset bridge between Cardano and Near.
However, despite the initial optimism, Ardana never launched its stablecoin platform or bridge, and the project closed down in November 2022 without a functioning product. The team cited funding and project timeline uncertainty as the reasons for the closure. At the time, the collapse of FTX had made it challenging for many projects to raise funds, and one of Ardana’s backers, 3AC, had recently gone bankrupt. Given this context, many investors accepted the official narrative of Ardana’s failure.
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But according to Xerberus, blockchain data and analysis tell a different story. The Xerberus team identified the Ethereum wallet used by Ardana Labs to collect funds from the DANA initial coin offering (ICO) in November 2021. They also found links to this address on the ICO platform Tokensoft’s web pages. The team claims to have identified a $1 million transaction from 3AC into this wallet, further linking the address to Ardana’s fundraising efforts.
Blockchain data shows that funds were raised and moved into other wallets through a series of intermediate steps. Approximately $3.2 million worth of stablecoins was transferred to a “Target Wallet” through two intermediate addresses. The funds were then swapped for CVX, a utility token used to receive fees from the Convex Finance platform, before being sent to what Xerberus alleges is Ardana founder Ryan Motovu’s old personal wallet. Motovu reportedly claimed that the funds in this wallet were from his previous bull market earnings. After approximately four minutes in Motovu’s wallet, the CVX tokens were transferred to the Target Wallet, where they were used to make various risky investments that ultimately led to the loss of Ardana’s funds.
In addition to on-chain transactions, Xerberus also identified approximately $4 million that was sent from Ardana’s fundraising wallet to centralized exchanges such as Kraken, Coinbase, and Gate.io. The team traced the outgoing transactions from these exchanges and found that many of the funds ended up in the Target Wallet, strengthening the case that the same user made the transactions.
Despite the mismanagement and loss of funds, Xerberus discovered that approximately $1.82 million was spent on development costs associated with the project, including team members’ salaries. They also found that around $1.4 million worth of USDC remains in the project’s possession in a wallet referred to as the “Treasure Chest” account.
The evidence presented by Xerberus suggests that Ardana’s failure was not solely due to funding issues but rather stemmed from the mismanagement of funds by the project’s executives. The case serves as a reminder of the importance of due diligence and transparency in the crypto industry, as investors should carefully assess the credibility and track record of projects before committing their funds.
