Ethereum Foundation faces scrutiny over $96.9 million transfer

On August 23, 2024, the Ethereum Foundation transferred 35,000 ETH (CRYPTO:ETH), valued at $96.9 million, to a Kraken exchange deposit address, sparking significant debate within the cryptocurrency community.

The transaction, highlighted by Arkham Intelligence and shared on the platform X, raised questions about the foundation’s transparency, leading to criticism from some community members.

One user on X voiced their concerns, questioning the timing and transparency of the transfer, and demanding greater financial disclosures from the Ethereum Foundation.

In response, Aya Miyaguchi, the foundation’s executive director, clarified that the transaction was a routine part of the nonprofit’s treasury management activities.

Miyaguchi explained that the foundation manages a budget of approximately $100 million per year, which covers grants, salaries, and other expenses.

Some recipients can only accept payments in fiat currency, necessitating such transactions.

Miyaguchi also noted that due to regulatory complications earlier in the year, the foundation was advised against making any treasury activities for an extended period.

She emphasised that the recent transfer was not indicative of an immediate sale, and any future sales would be gradual and planned.

Despite Miyaguchi’s explanation, the response did not satisfy everyone.

Gabriel Shapiro, a crypto attorney, criticised the foundation’s approach, arguing that the lack of clear direction in maximising the value of ether or the Ethereum network could hinder the growth of the crypto industry.

He pointed out that retail ETH holders were frustrated, feeling that the foundation’s actions were not aligned with their interests.

Marc Zeller, founder of Aave-Chan Initiative, also expressed dissatisfaction, questioning the foundation’s spending priorities.

He suggested that the foundation’s large budget might not be justified, given the relatively low compensation received by critical teams like Geth.

As the Ethereum Foundation continues to face scrutiny, the debate over transparency and operational practices is likely to persist, highlighting the ongoing tension between financial management and the broader goals of the Ethereum ecosystem.

At the time of reporting, the Ethereum (ETH) price was $2,755.25.