Compound Foundation denies misuse of V2 reserve funds amid governance controversy

The Compound Foundation is pushing back hard against accusations that it improperly used millions in idle protocol reserves to influence its own governance votes. The dispute, surfacing in Compound’s community forum on September 27, 2026, cuts to the heart of a question every major DeFi protocol eventually faces: who actually controls the DAO? The allegations, filed by a community member identified as ugurmersin, center on roughly 8.42 million DAI that was moved from Compound’s deprecated V2 reserves to a Foundation-managed multisig wallet. Proposal 536, approved in February 2026, authorized that transfer with a specific mandate: the funds were to remain DAO-owned and could not be deployed for speculative trading or to cover Foundation operating costs. The accusations in plain terms According to the forum post, what happened next was not what the proposal intended. On-chain data indicates that nearly all of the transferred DAI, approximately 99.98% of it, was converted into around 344,780 COMP tokens through what appears to have been trading desk activity. The timing is the part that raised eyebrows. Those COMP tokens were reportedly delegated to a Foundation-controlled voting addr...