Cosmos Foundation’s management comes under fire in governance vote. ICF pledges more transparency after shakeup It’s not the only blockchain nonprofit to face accusations of financial impropriety.
Cosmos is a Swiss non-profit organization that supports blockchain a vote Disbelief over suspicion that its leadership had mishandled funds intended to promote the development of Cosmos.
Like most blockchains, Cosmos is backed by a non-profit organization: the Interchain Foundation, or ICF, based in Zug, a Swiss hub for crypto ventures.
And like the foundations that support other blockchains, ICF has come under fire.
Along with the motion of no confidence, Grace Yu, the author of the proposal, is demanding the financial records of the foundation’s release years.
“ICF has conspicuously failed to uphold its fiduciary duties to ATOM investors and the Cosmos Hub,” Yu’s proposal said, referring to the blockchain at the heart of the Cosmos ecosystem and its native token.
ATOM has fallen more than 60% since January 1, hitting a four-year low.
Segmented validators
As of Thursday morning, the U proposal had divided Cosmos Hub validators. Just under 36% voted in favor, while a solid 32% voted against, or “vetoed,” because they believed the proposal was spam.
Another 32% voted “abstain,” meaning their votes would count toward a quorum rather than taking either side of the debate. Voting closes after midnight on Friday, New York time.
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Cosmos is designed as an “Internet of Blockchains”, a network of interconnected blockchains with a Cosmos Hub at its center.
A distributed network of computers, known as validators, that verify and order transactions in the cosmos hub collectively runs the blockchain, with their owners proposing and voting on changes.
In an interview with NewsYu, a strategy consultant and longtime ICF critic, found some loyal voters sitting on the sidelines. However, her supporters feel they are already having an impact.
‘We have a leadership crisis and things have to change.’
– Josh Cincinnati, ICF
On August 15, a week after Yu published a draft of his proposal, the ICF released it 2023 Annual ReportDescribes financial details from the previous year as well as future plans.
The ICF leadership promised to publish the report in early 2024 and attributed the delay to leadership changes.
“We have a leadership crisis and need to change; I’m working to change that,” said ICF President Josh Cincinnati. wrote that X has a back-and-forth with foundation critics, including Yu.
“There needs to be more transparency, but this ham-fisted attempt to force disclosure doesn’t help, it just distracts,” Cincinnati said.
So did the Cincinnati Foundation Submits For annual audits and is good condition With Swiss regulators, however Refused Citing the practice of other crypto foundations based in Switzerland, to publish financial statements shared with those regulators.
Cincinnati declined to comment when contacted News.
‘Full transparency’
The ICF is not the only foundation under fire in recent weeks.
Earlier this month, the Ethereum Foundation was criticized for its own failure to publish timely financial reports. Members rushed to assure critics that an update was in the works.
In May, that is Said It is working on a formal conflict-of-interest policy after a stir sparked by a pair of prominent researchers’ lucrative ties to the new protocol, EigenLayer.
ICF Cosmos raised $17 million in 2017 when it launched the ATOM token. It was established to fund the ongoing development of the technology behind Cosmos and to distribute grants among developers building applications there.
‘I don’t have the score to settle on the ICF.’
– Grace U
Last year, Notional, a validator run by Jacob Gadikian — another frequent critic of ICF leadership — had a vote In front of colleagues at Cosmos Hub, they ask to “officially request full financial transparency from the Interchain Foundation.”
“The ICF … has not issued any report to the cosmos community on its activities in nearly two years,” it said. “Many current and former, ICF-funded groups have come to Notional to voice their grievances.”
The vote passed. But to supporters’ dismay, the ICF ignored it.
Leadership is a mess
In the following months, it experienced almost constant turnover in its leadership. President Ethan Buchman, co-founder of Cosmos and CEO of software development firm Informal Systems, handed over Brian Crain’s role as then-Vice President. (Buchman became and remains a vice president of the foundation.)
Crain didn’t last a year. In May, Buchman and two other members of the foundation’s five-member council voted against restoring his presidency.
“A deep conflict emerged between the various parts [council] and between some parts [council] And ICF leadership,” he said wrote that On X.
In his own thread on Crain’s departure, Buchman acknowledged tension within the foundation’s ranks.
“Let’s face it, the ICF still faces big challenges,” he said wrote that. “And we may need more radical change in the future to deal with them.”
Buchman did not immediately return News‘ Request for comment.
Council member Fernando Pedone became interim president of the foundation. A month later, Pedon came down and laid the foundation Announced Cincinnati, A former head Elected President of Zcash Foundation.
A week later, managing director Maria Gomez, who had served in the role for three years, left.
Cincinnati says transparency under ICF leadership will improve.
“ICF believes that being proactive, comprehensive and consistent with updates will improve the visibility of our work, activities, purpose and goals,” he said. wrote that On X of last month. “Such programs are long overdue.”
Settling scores?
This year’s renewed calls for financial transparency have received a mixed response.
Attorney Joseph Aksisa, founder of a blockchain advisory firm and contributor to other crypto cooperatives, said his firm avoided Cosmos because of its “difficult management” of “various programs.”
“These naturally served as an incentive for us to devote time, resources and human capital to this ecosystem,” he said. wrote that In the Cosmos Hub Governance Forum.
But others saw something else at play.
A core validator deems a contribution inappropriate to vote ‘guide… chain.’
In addition to her role as an independent strategy consultant, she spent three months as Head of Growth and Strategy at All in Bits, a software development firm run by Cosmos founder Jay Kwan.
All in Bits sued Yu last year for allegedly defaming the blockchain network in violation of the terms of her contract. According to court documents, Kwon eventually withdrew the lawsuit and Yu said the altercation had nothing to do with her criticism of the ICF.
“This initiative should come from none other than the two of you,” one user said wrote thatReferring to Yu and Gadikian. (Yu and Gadikian denied his involvement in the proposal.)
“Grace and you are not proposing this in good faith,” they said continued. “Instead of working for the good of society you are settling scores with former colleagues again and again.”
Yu said her proposal was within the scope of her role at Atom Accelerator DAO, a collaborative funded by Cosmos Hub. The DAO is responsible for raising the price of ATOM, and Yu has served on its oversight committee since May.
“I don’t have a score to settle on the ICF,” she says. “I’m not an infrastructure provider, I don’t qualify for one – not because I don’t receive funding.”
A major validator deemed the vote inappropriate for a collaboration “intended to guide the technical and strategic direction of the chain.”
“Proposal targeting @interchain_io’s internal governance is off-chain,” validator, imperator, wrote that On X.
“Even if this proposal is approved, it will have no binding authority over the ICF, as it is governed by Swiss law and regulatory bodies.”
‘The direction is right’
others want Cincinnati, newly installed, to give time to right the ship before attempting to force a major course correction.
So far, the new ICF president has declined Yu’s invitation to address her concerns at the Cosmos Hub Governance Forum.
“You’re directionally right that people deserve more transparency, but I’ve played the ‘Angry Internet Forum’ game before and I’m honestly too old to play it again,” wrote Cincinnati X.
“I will deliver on a better ICF, or I will fail and resign, and you can judge as you wish.”
Alex Gilbert News‘ is a New York-based DeFi correspondent. You can reach him at [email protected].
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