$23 million of DAO funds are suspected of being manipulated and transferred, and the Across team is exposed to the "self-trading" scandal

Author: 1912212.eth, Foresight News

On June 27, the scandal of Celestia founder selling coins to prepare for a protracted war was temporarily calmed down, and another project was exposed. Glue founder Ogle tweeted publicly accusing the cross-chain bridge protocol Across team of manipulating DAO votes and misappropriating up to $23 million in funds. This accusation not only attracted widespread attention from the community, but also pushed the transparency and security issues of the DAO governance mechanism to the forefront again.

What exactly is Across? How did the project team manipulate the vote to embezzle funds?

Former UMA team starts a new business

Across is a cross-chain bridge protocol that aims to achieve seamless transfer of assets between different blockchains through efficient cross-chain interoperability. As early as the end of 2022, it received $10 million in financing from Hack VC and other investors. In March 2025, Across Protocol announced that it had raised $41 million in a round of token sales, led by Paradigm, with participation from Bain Capital Crypto, Coinbase Ventures, Multicoin Capital and angel investor Sina Habinian. The investor lineup is quite luxurious.

Its founder John Shutt previously served as a senior engineer at UMA, and another co-founder Hart Lambur is also the founder of UMA and Risk Labs. Risk Labs is the developer of the previously famous synthetic asset protocol UMA.

Since mid-2023, its token ACX has risen from the bottom of $0.05 to around $1.8, an increase of nearly 36 times. However, since the end of last year, under the negative impact of the market, ACX has fallen rapidly and has now fallen to around $0.14, a drop of more than 10 times in just half a year.

Across’s governance model relies on DAO, which allows users holding governance tokens to participate in proposal voting and determine the funding allocation and development direction of the protocol. However, the decentralized nature of DAO governance often faces questions of “centralized manipulation” in practice, which is the core of Ogle’s accusation.

Voting manipulation and misappropriation of funds

Ogle elaborated on the accusations against the Across team in a long article. He claimed that the Across team manipulated DAO voting through opaque means, bypassed the normal governance process of the community, and transferred $23 million in funds to unknown accounts. Here are some key points of Ogle's accusation:

Voting manipulation: Ogle pointed out that the Across team used the huge amount of governance tokens it held to dominate the voting results of the DAO proposal. The team centralized voting through multiple associated wallets, creating the illusion of community support, which actually violated the original intention of the DAO's decentralization. This behavior is exactly the same as the "governance attacks" that have appeared in previous projects such as Compound DAO and Jupiter DAO.

Misappropriation of funds: Ogle further accused the Across team of manipulating the approved proposals to transfer $23 million of DAO funds to accounts that were not supervised by the community. He questioned the whereabouts of these funds, saying there were no public audit records or transparent explanations of their use, and suspected rug pull misappropriation.

Lack of transparency: Ogle also criticized the Across team for lack of open communication in the governance process. For example, the content of the proposals was not fully disclosed, the voting process did not provide real-time on-chain data, and it was difficult for community members to verify the legitimacy of the results. He called on Across to disclose the flow of funds and accept independent third-party audits.

In addition, Ogle also specifically analyzed the detailed process. In October 2023, Kevin Chan, the head of the cross-chain protocol project, submitted a public proposal to the DAO, proposing to transfer 100 million ACX tokens (currently equivalent to approximately US$15 million) from the DAO to Risk Labs, the private for-profit company of the founder of the cross-chain protocol.

On-chain analysis shows that the proposal was actually secretly promoted by Kevin and his team. Although Kevin proposed the grant using his public address "KevinChan.Lens", he secretly cast a large number of "yes" votes through another wallet "maxodds.eth". Several members of the Risk Labs team appear to have voted together to approve this huge grant. Another team member, Reinis FRP, also voted "yes" to the proposal using millions of ACX tokens from multiple secret wallets. The second largest voting wallet in the entire proposal (accounting for nearly 14% of the total votes) was originally funded by Hart Lambur

Less than a year later, after the first vote had no consequences, the team returned to ask for more funds. This time, they asked the DAO to "retroactively fund" 50 million ACX, or about $7.5 million. Again, Kevin's secret wallet took on most of the voting work: "maxodds.eth" and a new wallet funded by it contributed 44% of the "yes" votes.

Ogle expressed dissatisfaction with this behavior when commenting on it, “In any other industry — whether it’s a public company, a nonprofit organization, a government agency, or anything else — there are strict rules prohibiting so-called ‘self-dealing’ and other rules that dictate how we should act to prevent other violations of our duties.”

Some community members support his view that the current state of DAO governance is worrying, while others question Ogle's motives and wonder if his accusations are intended to build momentum for Glue's competitive strategy. Glue is a security-centric public chain with a low profile and popularity in the crypto community.

As of now, the Across team has not officially responded to the allegations.

DAO governance problems are difficult to cure

Ogle’s accusation is not an isolated incident, but a microcosm of the long-standing problems in DAO governance. DAO (Decentralized Autonomous Organization) is an innovative product of blockchain technology that aims to achieve decentralized decision-making through smart contracts and token voting.

However, DAO governance in practice often deviates from the ideal, exposing the following problems:

• Centralization of power: Although DAOs aim to be decentralized, unequal distribution of tokens often leads to a small number of “whales” controlling voting results. For example, members of Jupiter DAO complained that the team manipulated governance by holding a large number of tokens, weakening the voice of the community. Similarly, the “Golden Boys” incident of Compound DAO also exposed a loophole in which a small number of token holders embezzled $24 million through proposals.
• Insufficient voting transparency: The voting process of many DAOs lacks verifiable transparency on the chain, and it is difficult for community members to track the actual voting behavior of tokens. Research shows that current DAO governance protocols generally cannot guarantee the long-term privacy of votes, and voting records may even be made public after the voting ends, increasing the risk of manipulation and coercion.
• Fund security risks: DAO treasuries usually hold huge amounts of funds, making them targets for hackers and internal attackers. The DAO hack in 2016 is a classic case in which attackers exploited smart contract vulnerabilities to steal $50 million worth of Ethereum, forcing the Ethereum community to hard fork. In recent years, flash loan attacks like Beanstalk DAO have also shown that governance vulnerabilities can cause treasury funds to be emptied in an instant.
• Legal and liability ambiguity: The decentralized nature of DAO makes its legal status ambiguous, and members may face unexpected legal liabilities. For example, in the 2023 Sarcuni v. bZx DAO case, a US court ruled that DAO members may be considered general partners and be jointly and severally liable for the losses of the agreement. This sounded the alarm for the legality and compliance of DAOs.

Based on the current problems of DAO, Ogle pessimistically believes that "almost all DAOs in the cryptocurrency field are outright scams, or at least disguised. I think the insider threats faced by investors in the cryptocurrency field are far greater than the threats from outsiders (such as hackers, etc.)."

summary

Faced with the dilemma of DAO governance, the industry needs to seek improvements from three levels: technology, mechanism, and culture. On the technical level, safer smart contracts and voting protocols can be developed. For example, the use of zero-knowledge proof (ZKP) technology can protect voting privacy while maintaining on-chain verifiability; multi-signature and time lock mechanisms can reduce the risk of treasury funds being stolen. On the mechanism level, token allocation and voting weight design can be optimized to avoid "whales" dominating. For example, introducing quadratic voting or a reputation system can give active community members more say. In addition, mandatory independent audits of proposals and funding flows can improve transparency.

Ogle's accusation against Across is a wake-up call for the blockchain governance ecosystem. As an ideal carrier of decentralization, DAO carries the community's expectations for fairness and transparency, but its development still faces many challenges. The industry should take this incident as an opportunity to accelerate the iteration and improvement of the governance mechanism.