Controversy erupts over alleged governance manipulation and questionable nonprofit claims

The founders of Across Protocol, a cross-chain bridge project, are facing serious allegations of misusing $23 million in tokens intended for their decentralised autonomous organisation (DAO). The funds were allegedly funnelled into a for-profit firm affiliated with the founders, sparking widespread backlash from the crypto community.

The accusations were made public by Ogle, a pseudonymous on-chain investigator and founder of layer-1 project Glue, who claimed the founders manipulated DAO governance to benefit their company, Risk Labs. The charges have since stirred debate about the transparency and integrity of decentralised governance in the Web3 ecosystem.

Alleged Manipulation of DAO Votes

According to Ogle, the co-founders of Across Protocol orchestrated two key DAO proposals which transferred a combined total of around 150 million ACX tokens, valued at over $23 million at current prices, to Risk Labs. Ogle claims these proposals were passed primarily through votes cast by insiders and team members, compromising the democratic process typically associated with DAOs.

The first proposal, passed two years ago, reportedly gained over 97% approval, supported by 13.1 million tokenholders. A second proposal was submitted a year later, requesting 50 million ACX tokens as “retroactive funding.” Ogle argues that without the team’s internal votes, the second proposal would have failed to reach the required quorum.

“The second-largest voting wallet, representing almost 14% of the vote, was originally funded by Hart Lambur,” Ogle alleged. Lambur is the founder of both Across Protocol and Risk Labs.

Nonprofit Status Under Scrutiny

The controversy intensified after Lambur claimed Risk Labs is a nonprofit foundation based in the Cayman Islands. He shared the company’s certificate of incorporation to support his claims, stating that the firm operates under fiduciary obligations and has no shareholders.

“If the funds are misused, you can sue the directors (me!),” Lambur posted on X (formerly Twitter).

However, Risk Labs’ nonprofit status remains unclear. The company does not appear on the Cayman Islands’ list of registered nonprofit organisations. While Cayman foundation companies can be structured as “ownerless” and barred from paying dividends, legal experts note that such entities can also serve commercial purposes and make distributions to beneficiaries.

Law firm Ogier explained that for-profit foundation companies in the Cayman Islands are allowed to distribute assets, casting doubt on Lambur’s assertion of a strictly nonprofit structure.

Defence from Risk Labs

Lambur denied all accusations, insisting that team members acquired tokens with their own funds and were free to participate in governance votes like any other DAO participant. He also addressed concerns over the transparency of the voting process, saying that the involved addresses were publicly disclosed.

He confirmed that a team member named Chan had voted in favour of the controversial proposal but dismissed the idea that the votes were secret or illegitimate.

“My team is free to buy tokens and privately vote in proposals, just like every other DAO out there,” Lambur wrote.

Questions Around Credibility and Conflict of Interest

In response to the allegations, Lambur raised concerns about Ogle’s anonymity and potential bias. He pointed out that Ogle has ties to rival projects, including LayerZero and Stargate, implying a conflict of interest.

“Funny enough, Bryan Pellegrino, the founder of Stargate and LayerZero, retweeted Ogle’s post almost immediately after he posted it,” Lambur noted, suggesting the accusations might be influenced by competitive motives.

Despite reaching out, media outlets did not receive any further comment from Ogle by the time of publication.

A Broader Debate on DAO Governance

The incident has reignited discussions around the nature of decentralisation in Web3 projects. Ogle described Across Protocol as one of many “DAOs that are DAOs in name only,” accusing its founders of undermining the ethos of community governance.

While Lambur and Risk Labs continue to reject the allegations, the case has drawn attention to the ease with which insiders can allegedly influence decisions in decentralised structures. With millions of dollars in question and legal ambiguities surrounding the foundation’s status, the crypto world is closely watching how the situation unfolds.