-
Across Protocol founders face serious allegations of manipulating DAO governance to divert $23 million in tokens to their affiliated entity, Risk Labs.
-
The controversy centers on claims that the decentralized governance process was subverted, raising questions about the transparency and integrity of DAO operations in the crypto space.
-
According to onchain analyst Ogle, the governance proposals were orchestrated to benefit insiders, a claim firmly denied by Hart Lambur, founder of both Across Protocol and Risk Labs.
Across Protocol founders accused of DAO vote manipulation to funnel $23M to Risk Labs, sparking debate over nonprofit status and governance transparency in crypto DAOs.
Nonprofit Status of Risk Labs Under Scrutiny Amid Governance Concerns
The core of the dispute lies in the classification of Risk Labs, the Cayman Islands-based entity receiving substantial token allocations from Across Protocol’s DAO treasury. While Hart Lambur insists Risk Labs operates as a nonprofit foundation with fiduciary duties, independent verification remains inconclusive. Legal experts note that Cayman foundation companies can serve commercial or philanthropic purposes, complicating the nonprofit claim. The absence of Risk Labs from official nonprofit registries further fuels skepticism about its operational transparency and accountability.
Legal Nuances of Cayman Islands Foundation Companies and Their Impact on DAO Governance
Cayman Islands foundation companies are unique legal structures that do not have shareholders but can distribute assets to beneficiaries. This distinction blurs the line between nonprofit and for-profit activities, especially when significant token transfers occur without clear contractual obligations. Such ambiguity raises critical questions about how DAOs should vet and approve funding proposals to affiliated entities, ensuring that governance remains democratic and funds are protected from potential conflicts of interest.
Allegations of DAO Vote Manipulation and Insider Influence
Onchain investigator Ogle alleges that Across Protocol’s founders engineered governance proposals to secure $23 million in tokens for Risk Labs, bypassing genuine community consensus. The first proposal passed with overwhelming support, while the second—requesting 50 million ACX tokens as retroactive funding—allegedly reached quorum only due to insider voting. Analysis reveals that significant voting power originated from wallets linked to Hart Lambur and Risk Labs team members, casting doubt on the fairness of the DAO’s decision-making processes.
Implications for DAO Transparency and Tokenholder Trust
The situation underscores the challenges DAOs face in maintaining transparent governance, especially when insiders hold substantial voting power. The lack of formal agreements governing the use of funds and the covert nature of voting wallets undermine tokenholder confidence. This case serves as a cautionary tale for decentralized projects to implement robust governance frameworks that prevent concentration of influence and ensure accountability to the wider community.
Risk Labs’ Firm Denial and Defense of Governance Practices
In response, Hart Lambur categorically denies any wrongdoing, emphasizing that team members purchased tokens independently and participated in votes openly. He refutes claims of secretive voting, highlighting that all addresses involved are publicly disclosed. Lambur also questions the credibility of the accuser, pointing to potential conflicts of interest given Ogle’s ties to competing projects. Despite these rebuttals, the controversy remains unresolved, with community members divided over the legitimacy of the governance process.
Community Reactions and the Broader Impact on Crosschain Bridges
The allegations against Across Protocol come at a time when crosschain bridges face heightened scrutiny due to their critical role in DeFi ecosystems. Trust and security are paramount, and any perceived governance failures can have ripple effects across interconnected networks. This incident may prompt other DAOs to re-evaluate their governance models and transparency measures to safeguard against similar disputes and preserve investor confidence.
Conclusion
The Across Protocol controversy highlights the complexities of DAO governance, especially when intertwined with affiliated entities operating under ambiguous legal statuses. While Risk Labs maintains its nonprofit stance and denies misuse of funds, the allegations raise important questions about transparency, insider influence, and the robustness of decentralized decision-making. As DAOs continue to evolve, ensuring clear governance protocols and independent oversight will be essential to uphold trust and protect community assets.
