Across Protocol Token Drops 10% Amid Allegations of $23 Million Misappropriation

The Across Protocol token experienced a significant decline of 10% today following allegations of team misappropriation involving approximately $23 million. The allegations, made public on June 27, claim that the Ethereum-based cross-chain bridge protocol manipulated governance votes to transfer funds to Risk Labs, a private for-profit company founded by the same team behind Across Protocol.

The controversy centers on two separate governance proposals. In October 2023, Kevin Chan, the treasurer of Risk Labs, submitted a proposal requesting that 100 million ACX tokens, valued at approximately $13.5 million, be transferred from the DAO to Risk Labs. The proposal was presented as a strategic investment in Across Protocol’s future, with assurances that the tokens would not be sold for two years. However, blockchain analysis allegedly revealed coordinated insider voting, with Chan casting a massive “yes” vote from a separate wallet traced back to him. Team member Reinis FRP allegedly used millions of ACX tokens across multiple secret wallets, while the second-largest voting wallet, representing 14% of votes, was allegedly funded by founder Hart Lambur.

A year later, the team requested another $7.5 million in “retroactive funding.” Chan’s secret wallets again accounted for 44% of the “yes” votes. This second proposal raised additional concerns when team members disclosed in discussion forums that they had been selling token option agreements to “strategic investors” using tokens from the first proposal, effectively monetizing rights to the tokens before the two-year holding period expired.

Hart Lambur, the CEO of Across Protocol, responded decisively to the allegations, categorically denying any wrongdoing. “In no way has the Across team ‘extracted’ value from the DAO. That is so insane it’s hard to even respond to,” Lambur stated. “I’ve been building in this space for 6 years. Me and my team are some of the few long-term builders that do things the right way.”

The allegations have resonated within the cryptocurrency community, with some founders and investors supporting the claims and urging further investigations into similar practices at other DAOs. The impact on ACX token holders has been significant, with the token declining 11.63% on the day the allegations surfaced, extending its 30-day losses to 40.95%. Currently trading at $0.1355, ACX has lost nearly all its value from its $1.74 all-time high reached seven months ago.

This pattern of allegations and subsequent market impact is similar to recent incidents in the space. Two months ago, OM, the native token of the MANTRA blockchain project, lost more than 90% of its value in a single day amid similar allegations of insider misconduct, erasing over $6 billion in market capitalization. The allegations against Across Protocol highlight the ongoing challenges and risks associated with decentralized autonomous organizations and the need for greater transparency and accountability in the cryptocurrency industry.