Compound Foundation Accused of Misappropriating DAO Reserves
The Compound Foundation is facing allegations of misappropriation after a delegate claimed that it secretly converted $52 million in DAO reserves into COMP tokens. Ugurmersin, the accuser, claims that the funds were swapped for COMP on an exchange and then returned to the Foundation's voting address 58 minutes before two key governance votes.
The alleged misappropriation is linked to Proposal 536, which stipulated that the DAO reserves would be used solely for protocol operations and could not be traded or used to cover the Foundation's costs. Ugurmersin alleges that the COMP tokens were used to sway the outcome of the governance vote, shifting nearly all DAO funds under the Treasury Management Committee and pushing through a $52 million V4 program that benefits the Foundation.
The accusation has drawn comparisons with the Aave governance dispute in December 2025. Compound is a smaller protocol than Aave, with around $1.6 billion in total value locked and a market capitalization of $230 million. The parties involved have not directly addressed the misappropriation claim, but the working group has defended the use of Snapshot votes as an operational efficiency.