CosmosHub: Declaration of No Confidence in the Interchain Foundation (ICF) Leadership: A Call to Action

Summary

This proposal calls for a vote of no confidence in the ICF leadership, grounded by serious concerns over governance failures, undue influences, neglect of purpose and duty.

Whether established or new, leadership needs awareness if it is to be accountable for the legacy, reputation, and future it stewards. No confidence sends a clear zero-tolerance message to the ICF Foundation Council about where they stand, reasons why, and what must be rectified.

However, this proposal is not an indictment; it’s more importantly, a decisive call to action.

An opportunity for stakeholders to assert constructive asks utilizing reasonable demands and timelines to achieve the transparency that previous calls for accountability failed to secure.

A YES vote for this proposal means signaling support for:

A demand for Comprehensive Annual Reports for fiscal years 2017-2023 within 60 days.
Specific guidelines for the content and structure of these Reports.
Contingency measures, such as directly petitioning the Supervisory Authority (FSAF) to pursue an audit on the ICF, if needed.

Links:

Full text of the proposal.

Forum Discussion

Translations: Chinese (Smpl, Trad), Korean, Japanese, Russian, and French

1. Preamble

1.1 ESTABLISHMENT

WHEREAS, the Interchain Foundation (ICF) was established on March 07, 2017, as a Swiss foundation (Stiftung) under CHE-199.569.367; and

1.2 LEGAL CONTEXT

WHEREAS, pursuant to Swiss law, a Stiftung may be formed solely for a specific, not-for-profit purpose and is subject to regulatory supervision by the Federal Supervisory Authority for Foundations (FSAF/ESA); and

1.3 MANDATED PURPOSE

WHEREAS, the ICF's mandated purpose is "promoting and developing new technologies and applications, especially in the fields of new open and decentralized software architectures. A dominating but not exclusive focus is set on the promotion and development of the Cosmos Network, the Polkadot Protocol and the related technologies as well as to conduct the necessary fundraising"; and

1.4 FUNDRAISING

WHEREAS, the ICF conducted an ICO for ATOM in April 2017, raising $17 million, to fund its endowment; and

1.5 ATOM ALLOCATION

WHEREAS, the ICF was given 20,277,188.49 ATOM, 10% of the Genesis supply, with the mandate to use these tokens for the interconnected purposes of the Cosmos Plan and its mandate established via charter; and

1.6 BENEFICIARIES

WHEREAS, ATOM ICO investors, token holders, validators, developers, and contributors who participate in Cosmos Hub governance are general beneficiaries of the ICF's activities, and hereafter collectively referred to as "stakeholders"; and

1.7 FIDUCIARY DUTY

WHEREAS, the ICF's ongoing fiduciary duty is evidenced by two key events: the ICO of ATOM tokens and the subsequent allocation of ATOM tokens at Genesis; and

1.8 RESPONSIBILITY

WHEREAS, the ICF bears the key responsibility of coordinating distributed development for decentralized Cosmos architectures, necessitating efficient resource allocation, good governance, legal compliance, and stakeholder engagement; and

2. Grounds for No Confidence

WHEREAS, the grounds for the declaration of no confidence and the "Call to Action" include, inter alia:

2.1 DEVIATION FROM MANDATED PURPOSE

WHEREAS, prima facie evidence suggests deviation and/or impermissible mutation of the ICF’s mandated purpose; and

2.2 BREACH OF FIDUCIARY DUTY

WHEREAS, the ICF has observably failed to uphold its fiduciary duties to ATOM investors and the Cosmos Hub, demonstrating indifference to the vital support ATOM still requires; and

WHEREAS, the failure to prioritize ATOM, despite having received ATOM, BTC, and ETH tokens to fund its endowment and key activities, represents a fundamental breach of trust, dereliction of purpose and core responsibilities; and

2.3 GOVERNANCE FAILURES

WHEREAS, lack of competence and expertise in foundation management has led to governance deficiencies indicated by:

a. Allegations of anti-competitive practices and abuse of dominant position by members of the Foundation Council (FC), potentially violating applicable competition laws and undermining principles of fair governance;

b. Governance instability highlighted by the resignation and replacement of two FC Presidents within an eleven-month period;

c. Inadequate checks and balances, and ineffective oversight mechanisms; and

2.4 CONFLICTS OF INTEREST

WHEREAS, unmitigated conflicts of interest impair critical functions in resource allocation and decision-making, particularly affecting grants, vendor agreements, investments, and token delegations; and

2.5 LACK OF TRANSPARENCY AND ACCOUNTABILITY

WHEREAS, the ICF claims comprehensive statutory reporting to the FSAF, including "ordinary audits," but the confidentiality of these filings prevents stakeholder verification; and

WHEREAS, despite the ICF's compliance with Swiss reporting requirements, its nearly eight years of non-disclosure and obfuscation have resulted in significant information asymmetry, demonstrating a failure to fully meet its transparency and accountability obligations to stakeholders; and

WHEREAS, this deliberate withholding of information appears strategically aimed at frustrating stakeholder demands for reform, creating systemic information barriers that disadvantage stakeholders and threaten the long-term viability of the Cosmos Hub and Cosmos project; and

2.6 FINANCIAL MISMANAGEMENT

WHEREAS, the ICF has shows signs of imprudent Treasury management, with funding disruptions likely stemming from poor risk management, diversification, and liquidity strategies; and

WHEREAS, the ICF's asset reporting fails to meet reasonable disclosure standards; and

WHEREAS, the ICF's failure to provide stakeholders with timely, comprehensive reports on significant asset changes and management strategies undermines accountability and breaches its fiduciary duty as a not-for-profit purpose foundation; and

WHEREAS, there are concerns about potential misuse of funds, including allegations of misappropriation and embezzlement, which, if proven, would violate civil and criminal laws; and

2.7 EROSION OF STAKEHOLDER TRUST

WHEREAS, all of the above-enumerated concerns extend beyond ethical considerations and/or violations of the ICF charter, but may also possibly contravene the Swiss Civil Code, Swiss Code of Obligations, Swiss Criminal Code, and Swiss Foundation laws; and

WHEREAS, these urgent issues necessitate immediate and decisive stakeholder action;

3. Call to Action

NOW, THEREFORE, We, the stakeholders of the Cosmos Hub, being duly empowered and justified by the foregoing, do hereby resolve to address the ICF’s systemic failures through the following:

3.1 DECLARATION OF NO CONFIDENCE

We hereby DECLARE formally our vote of no confidence in the ICF Foundation Council (FC) leadership;

3.2 PETITION FOR COMPREHENSIVE ANNUAL REPORTS

We hereby PETITION the ICF to publish Comprehensive Annual Reports (hereinafter "Reports") for fiscal years 2017-2023, as follows:

3.2.1 Individual Reports for each fiscal year; no consolidated Reports.

3.2.2 Each Report shall include:

a. All financial and operational information necessary to understand ICF's activities and programs

b. A reference to the appended Audit Scope Reference Document, which confirms:

Areas included in the annual audit
Areas not covered and why
Alternative evaluation measures for uncovered areas

c. Relevant audit findings, as deemed appropriate by ICF

d. Additional information for comprehensive understanding of ICF operations

3.2.3 In cases where certain information cannot be disclosed due to confidentiality constraints, the ICF shall:

a. State the nature of the information that cannot be disclosed

b. Provide the legal/regulatory basis for non-disclosure

c. Offer any permissible summary or redacted version of information that can be shared

The above-described reporting structure defines the desired scope for the requested Comprehensive Annual Reports.

Including relevant audit findings, as deemed appropriate by the ICF, further enhances transparency while maintaining necessary confidentiality.

3.3 TIMELINE FOR DELIVERY

We CALL FOR the Reports to be published within 60 days of this proposal's passage.

3.4 CONTINGENCY MEASURES

We ESTABLISH:

3.4.1 In the event Reports are not delivered within 60 days, the stakeholders will petition the FSAF directly for an appropriate audit.

3.4.2 If discovered that the ICF has misrepresented the scope of its annual audits, stakeholders will report the misrepresentation and petition the FSAF for an audit and investigation, irrespective of the 60-day waiting period.

3.5 AFFIRMATION OF INTENT

We AFFIRM this action aims to realign the ICF with its mission and restore stakeholder trust.

4. Voting Options

YES - Expresses no confidence in ICF leadership and supports the petition for reports and potential FSAF involvement.

NO - Does not approve this proposal.

ABSTAIN - Contributes to quorum without voting for or against.