$8.4M Compound DAO Reserve Alleged Misappropriation Sparks Governance Friction

A formal accusation has been made against the Compound Foundation for allegedly misappropriating $8.4 million from the Compound DAO reserves to purchase COMP tokens.

The funds in question were allocated under Proposal 536 and were supposed to be used as operational capital for the community, according to a market report. However, on-chain records show that they were swapped on an exchange for 344,780 COMP tokens.

The assets were then transferred back to the Safe multisig wallet just 58 minutes before voting closed on Proposals 580 and 582. The signers of the multisig treasury allegedly delegated their voting power immediately to the Foundation's address.

This technical maneuver may have enabled the approval of handing over treasury control to the Treasury Management Committee (TMC) and facilitated the ratification of a Version 4 (V4) development program valued at $52 million.