Compound Foundation has denied improperly using DAO reserves after delegate ugurmersin alleged that roughly 8.42 million DAI from deprecated V2 reserves was converted into COMP to influence governance. A Bitquery reconstruction found that 344,780 COMP entered a DAO reserve wallet 58 minutes before the May 5 snapshot for Proposal 582, and the wallet's voting power had been delegated to the Foundation. Supporters ultimately held 50.1% of delegated voting power, enough to prevent all other delegates from defeating the proposal, which passed with about 1.88 million votes in favor and none against. The Foundation said the conversion supported governance continuity, the COMP remained DAO-owned, and no assets funded its operations. The dispute now centers on whether Proposal 536 permitted converting reserve assets into governance voting power.