A governance forum post published on Sept. 28 accused the Compound Foundation of using 8.42 million DAI from DAO-held v2 reserves to buy COMP, then delegating that voting power to its own address 58 minutes before a key proposal snapshot.
The post, titled "Foundation Misappropriates v2 DAI Reserves," was written by ugurmersin. It alleged that the Foundation exceeded its mandate, converted the reserve into COMP, and used the tokens to help advance the $52 million V4 plan and a transfer of treasury management authority. The post included full on-chain transaction records and suggested legal action could follow. According to the source article, the described fund flow was broadly accurate. After the allegations surfaced, COMP fell about 1%, then began rebounding from 11:00 that day. At the time of writing, COMP was trading at $24.55, recovering all of the previous day’s losses.
How the 8.42 million DAI moved
On-chain records show that on March 10, a Foundation multisig beginning with 0x0F51, which held the DAI, swapped 8.42 million DAI for the same amount of USDC through Spark PSM and deposited the funds into Compound v3’s USDC market.
Between March 11 and March 12, the Compound Foundation spent about 430,000 USDC through over-the-counter trades to buy 25,000 COMP. Then, on April 9, April 15, and April 25, it withdrew 7.988 million USDC from v3 in three transactions, sent the funds to an intermediary wallet beginning with 0xfb20, and from there moved the money, in million-dollar increments, into a Binance deposit account.
After that, an address beginning with 0xb03e withdrew about 420,000 COMP from a Binance hot wallet and from Wintermute-linked addresses. On May 5, 344,780 COMP returned to the Foundation multisig through an intermediary address beginning with 0x729d.
Bitquery independently verified that the DAI was in fact swapped into USDC, routed through a trading desk into Binance, and followed by roughly 345,000 COMP leaving the exchange and returning to a Foundation-managed multisig. The timing also matched the allegation: the tokens arrived less than an hour before the proposal snapshot, and the voting power had already been delegated to the Foundation’s public voting address.
The Foundation later acknowledged the transactions. It argued that the trades were within the authorization granted under the original proposal to maintain a COMP reserve needed for governance execution. It also said the assets remained owned by the DAO and were not used for the Foundation’s own spending.
Bitquery’s review pointed to another layer
If the story ended with the asset transfers, the issue would look like a standard dispute over whether a trustee overstepped its authority. But Bitquery’s review also highlighted something else. Five days before publishing the accusation, the same author wrote in another forum post: "Everyone here knows Humpy is delegating votes to me." That line changed the frame around the dispute.
Humpy is one of the most controversial whales in DeFi. In 2022, he accumulated enough voting weight in Balancer to control governance decisions, and the conflict ended only after nearly a year with a settlement. In March 2024, a SushiSwap leader publicly accused him of trying to steer token emissions into his own liquidity pool. In July 2024, the Golden Boys group led by Humpy pushed Compound Proposal 289 through on its third attempt, seeking to route $24 million worth of treasury COMP into a yield product under its control. The community broadly described that episode as a governance attack, and it ended with a compromise that raised the proposal execution delay and introduced a staking product. OpenZeppelin and Wintermute were among the parties that described it at the time as a predatory attack on the protocol.
On-chain records cited in the source article show that after May 2026, an address cluster linked to Humpy became active again. Bitquery tracked 33 wallets with about 1.61 million votes combined. Between May and September, those COMP tokens were gradually consolidated into one address, which then exercised the voting power centrally. On Sept. 14, a delegation of about 25,000 votes pushed that address above the threshold needed to submit a proposal.
Proposal 608 passed before the accusation appeared
Five days later, Proposal 608 was submitted on-chain. It sought to transfer control of a new institutional lending market to DAO governance, and the proposal had been drafted by ugurmersin on the forum on Sept. 9. The address cluster tied to Humpy supplied 1.77 million votes in favor and pushed it through. The Foundation voted against it but could not stop it.
Right after that, the same voting bloc defeated Proposal 609, a routine proposal. That mattered. It showed the cluster could not only pass its own proposal but also veto someone else’s.
That changed how the Foundation’s earlier COMP purchase looked. The article said the reserve-funded COMP position made Proposals 580 and 582 mathematically immune to the cluster’s potential opposing votes at the time. Without those tokens, the cluster might have had enough voting power to overturn the proposals. In practical terms, the disputed purchase helped defend against the very faction tied to the person now making the accusation.
The timing is hard to ignore: the forum post appeared just after that bloc had completed a successful expansion of power through its own proposal.
The broader Compound backdrop
For the past six months, Compound’s central task has been building v4, with a focus on institutional credit infrastructure, support for real-world assets, improved capital efficiency, upgraded liquidation mechanics, and partner integration tools. The proposal at the center of the controversy was described as a routine one: after sunsetting v2, the remaining reserves in that market would be managed by the Foundation.
In May, Compound created a Treasury Management Committee to oversee nearly all of Compound DAO’s treasury assets. The committee is controlled through a multisig and is tasked with allocating funds to professional asset managers through an RFP process for conservative treasury management.
According to the source article’s framing, the Foundation’s use of leftover funds from a retired version was intended as a defensive step to protect development of v4, the protocol’s main strategic project. The article also placed the move within a wider DAO trend in which teams reclaim part of treasury management authority so they can concentrate resources on major initiatives.
On Sept. 8, Compound launched its first v4-related product, Institutional Market. The product offers a USDC lending market and accepts ETH, wstETH, WBTC, and cbBTC as collateral. It has a maximum LTV of 87% and a higher liquidation threshold. In its first week, the market recorded about $20 million in deposits and about $14.8 million in borrowing.
Core facts remain in dispute only on interpretation
The underlying on-chain facts cited in the accusation have not been overturned. DAI was turned into COMP. The voting power was delegated to the Foundation’s own address. The tokens arrived 58 minutes before the snapshot. Those points stand.
What remains open is whether the Foundation’s actions fully matched the original intent of the authorization. The community still has reason to press that question. But another set of facts also stands: the person making the accusation publicly acknowledged receiving delegated votes from a whale with a record of governance conflicts, and the proposal he drafted passed with support from that same voting bloc. The accusation surfaced only after the balance of power between the two sides had shifted.
That leaves the episode looking less like a neutral act of community oversight and more like another round in Compound’s long-running fight over governance control.