The Compound Foundation is strongly contesting allegations of misusing approximately 8.42 million DAI from deprecated V2 reserves to influence governance votes. On-chain data analyzed by Bitquery reveals that nearly all of these funds were converted into roughly 344,780 COMP tokens, delegated to a Foundation-controlled voting address just 58 minutes before the deadlines for Proposals 580 and 582. Both proposals passed, including one advancing a $52 million V4 protocol initiative. The Foundation denies any misappropriation, asserting that the assets remained DAO-owned, but has not directly addressed the timing of the token conversion and delegation. The legitimacy of the governance vote approving the V4 program is now being contested by the community.
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