Letter from ICF Founder, why No to #839
Hi respectful community members, I’m Ash Han, Hashtower validator, and I voted No on proposal #839 because I am deeply troubled by the indicators of ICF mismanagement, and their deviation from the given mandate. My history with Cosmos and the ICF is deep-rooted. I am the founder of the Interchain Foundation. This year, due to new South Korean regulations, I had to seek specific financial details and statements from the ICF concerning our historical relationship. To comply with these regulations, I asked for(the conversation began since June): (a) Confirmation of my non-participation in board decisions. (b) Financial reports from 2017-2022. (c) A confirmation that there were no financial transactions between the ICF and myself, barring the initial deposit (I provided the initial capital to establish the foundation) Despite being the founder, the response I received was alarming. It took the ICF a month to reply, and when they did, it was to challenge my rights as a founder and refuse my information request. My request was neither adversarial nor beyond reasonable limits. My request is very simple and prompted by mandatory disclosures I must make to my government. The…
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Ash_Han:It took the ICF a month to reply, and when they did, it was to challenge my rights as a founder and refuse my information request.
Sounds almost exactly how they respond to security problems. I’m really sorry that you’re having the same frustrating experience.
thanks Jacob Gadikian
unfortunately, it seems we learn our lesson that a single root cause actually has impact on many layers only when it comes to you in person.
Ash_Han: We can both correct the chronic distrust situation of ICF and also continue the software development of the Cosmos ecosystem by the best hands but in a fairer terms. Sir, we haven’t met or spoken before (at least I think we haven’t) but – YES. We can make meaningful long term improvements to cosmos overall by recognizing that there are serious questions about the icf – and about Informal Systems. My good vibes and rapport with respect to @jtremback are so significant that I would have no questions about handing him the full requested amount in cash BTC gold or atom, and sleep well knowing he would work hard to ensure good outcomes. I do not feel the same way about informal. about the information you requested If you were given this information buy the foundation, does it eventually become a matter of public record? The reason that I’m asking this is that it might be a good idea to use governance to make it extremely clear exactly what information you are seeking. If you need any assistance with the governance proposal process or a template, you may wish to have a look at proposal 787. But, please know that ultimately I believe that 787 was a…
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Thank’s for sharing these information.
We didn’t vote yet as we are collecting information still to position our vote.
The clear point you made that is alarming is “the lack of legal mind”. Many companies and organisations are dying with gold in their hand just because of this.
It’s also clear that the full top management having different projects and occupations cannot have proper skills for their rank on this particular project (cf management/communication reports from many parties).
It looks clearly a bias situation that will never change until they revoke one of their role (probably leaving ICF would be the best choice in their case).
I think the “lack of legal mind” is made apparent in Brian’s offer to retroactively reimburse the hub $3.5m if 839 passes. Talk to any lawyer working for crypto-tech based project, or any foundation being scrutinized by the SEC. Sending $ATOM directly from foundation treasury to Cosmos Hub is the smoking gun Gensler need to make an unequivocal case you’re an “Active Participant.”
It’s irresponsible.
I don’t understand what the link is between “ICF not talking to me” and “I’m voting no on prop 839”
Prop 839 is about the Hub paying for its own development. What’s the vote on 839 got to do with ICF’s dealing with you?
Just a reminder too, the full text of 839 proposal is here:
docs.google.comFund 2024 Hub development by Informal Systems and Hypha Worker Co-op
Summary This is a proposal to fund a core development and testing package on the Cosmos Hub for 2024. The teams that would receive funding if this proposal passes are the Cosmos Hub Teams from Informal Systems and Hypha Worker Co-operative. The total...
If 839 passes, upon approval, they’re liquidating $4m of ATOM and having that transferred to teams’ vesting accounts.
I also think it’s incorrect to vote YES on a proposal that authorizes $5.7m budget when the effective real ask (if you are to believe what ICF says) is $2.2m.
Informal and Hypha should resubmit a proposal requesting $2.2m.
Separately, how much longer are we going to subsidize Informal Systems, a private Canadian entity? Alot of folks seem to be remiss on the fact that Informal cost estimate includes costs of overhead for their entire team: HR, legal and admin. Imo, this is less a proposal to maintain hub development. It’s a proposal to maintain Informal.
jehan
839 is a proposal to fund Informal, not just “hub development.” I believe his point is that it’s not right to continue funding development activities under the Informal organizational umbrella so long as the relationship between ICF and Informal remains unclear. To add emphasis to the lack of transparency surrounding multi year allocations from ICF to Informal, Ash is saying that even as the founder of ICF, he is denied financial reports. This is disturbing. I think it’s interesting his request was not “adversarial” as he says, he needs the financial reports to be in compliance with regulations in South Korea. And due to ICF’s non cooperation, he is now subject to penalties. If he can’t get the reports. The community never will. The question is why? What are they hiding? Ash is also saying the mandate for the foundation is clear, and the foundation should be funding hub development – and this application of the ICF’s “distributed development” model is contrary to what the foundation was created for. All this uncertainty about who funds cosmos hub and CESS (cosmos essential software) is inherently chaos stemming from foundation council’s non adherence to its given…
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It’s typical for development organizations to charge customers high mark ups for short term no commitment contracts.
I don’t actually think the proposed mark ups from Informal are unreasonable. They are substantially below norms for custom software development and customer support which would typically market up at over 100% of salaries and costs.
As I understand it, founder of a Swiss foundation literally means nothing after a foundation is set up.
Cosmos essential software - comet, IBC, SDK - those are being funded. But this is still besides the point - I don’t see a link between ICF issues and this funding prop.
It’s like me voting yes or no on the prop, based on the fact that Coinbase has Atoms, and they also have SOL.
Asking yourself “what the f does that mean”? Exactly.
Hi everyone, Brian here from the ICF (president and member of the FC). I wanted to provide some context here for why we did not grant various of Ash’s requests. As Ash has noted, he was involved very early on and was the founder of the ICF. What that means is that he paid 50k in initial capital. He did not have any involvement afterwards in the foundation, as far as we know. A few months ago, Ash emailed and asked that the ICF provide him with financial reports that he can submit to some Korean regulator. The ICF is a Swiss foundation and does not have any reporting requirements to some Korean regulator. Nor did we receive any request for information from such an entity directly. We pointed out to Ash that he has no official role in the foundation and has no obligations, but also no special rights related to the foundation. And that we would not submit this information to him or some Korean regulator. Ash then repeated his request and said that he was surprised that he was not on the board. This is more than 6 years after the establishment of the foundation during which time AFAIK Ash had no involvement with the foundation. I don’t understand how he was under the…
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Believe cosmos nanny’s point was that you aren’t allowed to send money into the Community Pool, as you stated.
You paying Informal or any other entity is probably okay (usual due diligence, etc), but the issue is with paying into the Community Pool - that’s you making a donation to a shared, public, funding pool.
But more importantly, so Ash comes out of the hiding after 6.5 years, and thinks he’s been a member of the council all that time and so should be leading the foundation? Wtf
I get that this is what Cosmos Nanny claimed, but I don’t know what this claim is based on. I’m not aware of any such rule and I discussed this with our legal counsel. So I think it’s fine to directly donate to the public funding pool as long as we know what will happen with the funds. (Which we do here.)
ICF should definitly not be a part of the future fund of cosmos hub . Cosmos hub need to be totaly sovreign and allocate grants by the CP overall
@Guinch_Roze
So your preference would be that none of the ICF’s treasury would go towards supporting Cosmos Hub development?
You say you’ve checked in with counsel, I would double check and add emphasis to the transaction being ICF multisig sending ATOM directly to Cosmos Hub cp.
Or am I misunderstanding the tx structure?
Thanks for your response above.
You are not misunderstanding and I was clear about this.
To be clear it’s based on conversations I’ve had with US lawyers to understand how the SEC and NY AG office evaluates who is an Active Participant. And why.
So long as foundation mandate remains unchanged, the hub stays in funding scope imo
I’ve found ICF transparency reporting from 2017-2022 to be frequently misleading.
In ideal world, there would be enough publicly available information for Ash to satisfy his regulators.
Typically reports are without context on what was founded and why.
The 2022 report doesn’t mention the failure of Tendermint team, the collapse of Interchain Berlin and how that led to many of the current funding dilemmas.
The opacity is so unnecessary.
I am asking myself why we don’t have an accounting chain/accounting rollup, we are all involved in the crypto industry and we still don’t have a publicly open solution. This would solve so many problems…
Definitely stays in funding scope for the ICF IMV.
I think ICF allocating a part of the budget to the community pool to be used for Cosmos Hub development is a great solution. It increases decentralization, reduces reliance of ICF on Cosmos Hub and still provides financial support to continue growing the Cosmos Hub.
Definitely agree that for most of the ICF’s history, public reporting was not sufficient. I thought the last report was very good, though your points are fair and maybe should have been included.
To your comment about founder having nothing to do with a foundation – I think that depends on what kind of rights are enshrined in the charter and bylaws.
A Swiss foundation has no owners and shareholders, and the reason serious mandates married to serious money choose the legal form of a Swiss foundation is the foundation board’s job is to strictly adhere to the use of funds to realize purpose.
When you review the special privileges a founder retains under Swiss code, I don’t think it’s correct to say a founder has nothing to do with it after it’s made.
So you are correct that the bylaws could specify some ongoing role for the founder after the foundation is established. But this is not the case for the ICF. There was no ongoing role specified for the founder. So in this case, indeed, the founder had no rights and obligations any point after establishment.
I agree. It feels a bit cart before horse, however. While the ICF says the hub is “ready” to keep teams accountable, my observation is it is not. It’s more aspirational and wishful thinking. This proposal has become unreasonably contentious and confusing bc the objective merit of the ask from Informal is difficult to establish with no meaningful information or context re: how much ICF has spent supporting Informal over the years. For what and how much (with exclusion to 2022 report) is unknown.
I’ve said this in other threads and channels, and forgive the redundancy. If you want the hub to become a partner in your distributed development and funding model, empower us with information.
To Zaki’s point, what has been made available is selective and at times misleading. We can reduce the volume of controversy with more complete transparency actions from the foundation.
Just put the stuff on chain… seriously… why can’t we track the funds reserved for the HUB on a chain, 90% of the stuff has to be solved with smart contracts
- you apply for grants
- you get the grant
- deposit money in a smart contract
- money gets vested over time, you have to reach certain milestones
Everyone can follow the development
crainbf:The ICF is a Swiss foundation and does not have any reporting requirements to some Korean regulator. Nor did we receive any request for information from such an entity directly.
The foundation doesn’t have any reporting requirements to SK government, but the founder of ICF does.
The relevant SK authority does not inform or notify the ICF in this case. Notice of, and standards for reporting requirements are conveyed to Ash directly, the founder. What they’re trying to establish is to what extent, if at all, has he gained an economic benefit from creating Interchain Foundation?
The SK government is presuming that as founder, Ash has access to the information you are denying him.
I don’t get it. It seems unnecessarily hostile withholding information when the information request derives from a person’s need to be in compliance with his country’s laws.
Why can’t you put it under the cover of an NDA and just share and be done with it?
crainbf:Notably, Ash did not apply when we opened the FC applications
You say that Ash was under the impression he has been on the board then entire time.
Why would he apply if he believes himself to already be on the board/council?
I find it hard to believe he actually thought he was on the board. Certainly he didn’t attend a single meeting, sent an email or did anything else that a board member usually does.
Ash_Han:The foundation’s audacity or lack of legal mind to dismiss my contractual request raises questions about its integrity (I reserved the right to access and monitor activities as a part of a contract for establishing the foundation).
According to @crainbf : “Ash claims that some promises were made for him to be added to the Foundation Council 6.5 years ago. But no current FC members have any knowledge of this and, again, he was never added.”
Hi Ash, thank you for sharing your statement.
If possible, can you clarify what you mean by “contractual request?”
As far as your expectations for FC seat, is this belief predicated on a “request,” a “promise” or a contract?
crainbf:In my view, this would increase decentralization and decrease the influence of the ICF on the hub. (Which is a great thing IMV.)
If your objective is to minimize the influence of ICF on the hub, your validator Chorus One should have abstained, rather than voting YES on 839.
Your pro 839 lobbying can be perceived as exerting influence on how the hub spends community pool’s funds. Your many statements re: 839 funding request expresses an unambiguous managerial interest (from the ICF), ser.
Mere sharing of development/maintenance cost does not translate into sufficiently decentralized influence or authority. You’re using the reach and pulpit of your role as President of FC to induce an outcome; and you’ve added 1.52% vp from your validator to secure it.
Does not sound or appear to be decentralized.
so Notional will vote NO or abstain?
This reply should be pinned!
Someone thinks they have a job, doesn’t say or do anything for 6+ years, and then comes and says “yo, wat up”…gtfo 
I say GTFO with all due respect - I’m sure he was a key person back in the day…but seriously, 6 years later you notice you’re not on the board?!?
I don’t even know how to fit this storyarch in my Netflix Cosmos Drama show…
To be fair it doesn’t sound like he asked for a “job.” And we should wait to hear both sides.
What has been confirmed from both sides is that there was an information request for financial reporting and it was denied.
The ‘someone thinks he’s got a job’ was the translation Brian made, Ash was only requesting the documents for SK’s regulator. Like Cosmos_Nanny mentioned ICF’s public documents should have been sufficient for this SK requirement but they weren’t, hence the request by Ash. You need to ask ICF why cannot them give him such documents as the funding documents itself should be transparent. Someone also mentioned putting the funding on chain and Brian has yet to respond. I’ll hold my vote until all these are clear.
meandme:Someone thinks they have a job, doesn’t say or do anything for 6+ years, and then comes and says “yo, wat up”…gtfo
I will believe this as soon as @crainbf or @Ash_Han posts the actual emails sent.
Otherwise it is totally possible that this isn’t the case.
Folks, this is why you’re always seeing screenshots from me.
@crainbf if dude showed up after 6.5 years thinking he had a role, prove it.
@Ash_Han I don’t know what you need to ask of the icf, but my recommendation to you is to place as much information about your requests to the icf in the full public domain as possible because it then enters the record of events around the hub.
Folks if this is a simple situation where @Ash_Han just needs some info for a new reporting requirement then it makes no sense not to give it to him.
Additionally, refusal to give @Ash_Han information means the foundation has financial information that is has not released.
Proposal 787 stipulates full financial transparency.
Santorini: Notional will vote NO or abstain? Unfortunately it is looking more like veto. • Amulet continues to make false claims about what notional reported • Informal continues to attempt retaliation against notional for making a security report 1000006090 706×1215 210 KB @ebuchman @crainbf Do my comments there look like Spam? Because I think those comments are a bunch of links that are directly related to why we are removing the mempool. Bucky, you’ve been retaliating as well. Unless of course you can prove, as you claimed, that I was making threatening statements. Prove it @ebuchman , prove it now! … I have asked you numerous times in public and in private to prove it. Did you hallucinate it? Were you high on acid? I really don’t know how else You can come to these conclusions. In a sane software ecosystem, when somebody makes a bug report on something enormous, you say “thank you”. • Notional feels it is in the hubs best interest for informal systems to have nothing to do with the cosmos . • Notional feels that continued funding to informal systems puts the entire cosmos at risk. Their CEO and some members of their engineering teams have…
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I have no personal ambition in ICF, nor any financial interest in its operations as it’s been for many years. However, I feel heavily responsible for how the foundation is legally compliant, using my capital properly, running according to the Notarial Deed I signed off on and making sure there’s no potential criminal activity for my own reputation and my own peace to sleep at night.
How would you feel if it were your name, signature, and reputation attached to an organization that provides very little to no meaningful transparency? If it was your life, and your compliance with your government attached to yet another crypto foundation falling into possible disrepute?
How would you feel if you helped organize a $17m fundraiser for the foundation you created – and this foundation ends up pleading imminent poverty 6.5 years later?
After receiving 5000 BTC and 240,000 ETH in 2016? After receiving 20,000,000 ATOM at Genesis in 2019?
Would you be able to sleep at night? Have some empathy bro.
jacobgadikian:Because I think those comments are a bunch of links that are directly related to why we are removing the mempool.
You think or you know? Thank you.
meandme:I don’t understand what the link is between “ICF not talking to me” and “I’m voting no on prop 839”
Hi meandme,
It’s simple.
It’s natural that I can’t trust ICF’s current financial practice that is unable to provide financial reports even if they have to share and unable to share the statement they promised months ago, so I wouldn’t support another major fund transfer until it’s clear and I can trust again.
So you are saying any public company in the US is more transparent than an “open systems” entity like Informal? Moreover, as far as I understand Informal is a for-profit entity. Other coins have for-profit entity and they tend to find business customers and raise their own money. In this way they find real world usage of the token they support which is part of the reason why they exist. They don’t routinely raid the protocol treasuries. More importantly, is there an end state for the Cosmos Hub after which there should be no development? Or is the Informal or other teams thinking that the Cosmos Hub will be always in active development? As a guy who ran IT departments of major banks, you would develop a certain project for a few months to a year and after that the project would go in maintenance mode. In other words, during active development for some division you would hire 10-20 people develop a bunch of apps for 2-3 years but then at then end you fire everybody and 3 people sit and maintain 20 apps. For how many years and what functionalities do we need Cosmos Hub development? We have Shared Security out. I understand there maybe some maintenance of that to work out…
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meandme:Someone thinks they have a job, doesn’t say or do anything for 6+ years, and then comes and says “yo, wat up”…gtfo
I am asking for financial reports, which is my right upon the establishment agreement.
And Brian is claiming that the right doesn’t exist because they didn’t register, which is also their malpractice.
I need nothing more than that.
meandme:so should be leading the foundation?
Unfortunately I don’t want to lead or have any ambition here.
Cosmos_Nanny:
crainbf: The ICF is a Swiss foundation and does not have any reporting requirements to some Korean regulator. Nor did we receive any request for information from such an entity directly. I do and I am the founder. As you well know, governmental duty is your responsibility to comply not government is reminding you every time when there’s set rule. And later penalty or fine would follow. crainbf: Ash then repeated his request and said that he was surprised that he was not on the board. This is more than 6 years after the establishment of the foundation during which time AFAIK Ash had no involvement with the foundation. I was surprised that you told me I had no right to receive the reports and my right has’t been registered with your own ignorance. I didn’t expect it to be the certain board at first since the right could’ve been registered in many forms and names. You guys were really slow back in the days too. crainbf: I don’t understand how he was under the impression that he was on the board this entire time, but obviously makes no sense and is easily verifiable in the official company registry Because you(ICF) never disclosed the…
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Ash, if it helps, I am happy to get on a call with you and Brian.
And I want to say thanks for setting up the foundation.
Additionally, because of the retaliation out of informal, Notional will now change our vote to veto.
I hope that you will consider the same and consider urging others to do the same.
I spoke with @uditvira this morning and I urged him to veto this proposal as well. FYI, @uditvira, @jtremback and I have an excellent working relationship and I want them to run the hub.
So I think that they are going to need to change corporate structure because informal systems is just not a safe organization. When organizations retaliate against security researchers and try to bury information about security, they put the whole ecosystem at risk.
That is the reason for my veto.
I hope you will join me.
Isn’t @uditvira Hypha?
Why would he veto his own funding request?
“No” to #839 My reason for “NO” is simple and clear: It’s natural that I can’t trust ICF’s current financial practice that is unable to provide financial reports even if they have to and unable to share the statement they promised months ago, so I wouldn’t support another major fund transfer until it’s clear and I can trust again. Also I am totally fine even if the proposal is passed because this “NO” is considered my expression of distrust and urge for change in ICF. I respect if other validators feel they can trust ICF and fine with spending the community pool for the company of another ICF member. Or they feel that even if they don’t trust ICF, still important to get them work for Cosmos anyways. Still, I believe people might have various reason for “NO”, which I respect: • They think that the proposal should be modified and re-applied in a better fit way. • They don’t want to have the community pool drained and reserve it for other more casual supports for other teams while ICF’s fund is there to support the core dev work. • They want to express the concerns regarding the chronic opacity and nepotism wishing for some change • They want to show some…
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@crainbf @ebuchman @jaekwon @mpg Can you confirm this is the notarial deed that was registered to create the foundation on 02/08/2017?
Source: https://github.com/gaiaus/ICF/blob/main/people/ash_han/ICF%20Founder%20Ash%20Han.pdf
Thank you for sharing.
true
And it’s little more than ideal. I believe it’s the minimum they are obliged to.
Ash_Han:Also I am totally fine even if the proposal is passed because this “NO” is considered my expression of distrust and urge for change in ICF.
The problem is that there’s no difference between the ICF and informal systems. That’s why I’m recommending veto, and that’s actually why the security issue was not addressed much earlier.
Ash_Han: I do and I am the founder. As you well know, governmental duty is your responsibility to comply not government is reminding you every time when there’s set rule. And later penalty or fine would follow. It’s our duty as a Swiss foundation to comply with Swiss law. It’s definitely not our duty to comply with whatever imaginary law applies in whatever country. And, once again, we never received any request for information or otherwise from any Korean regulatory and just from you personally. Ash_Han: I was surprised that you told me I had no right to receive the reports and my right has’t been registered with your own ignorance. I didn’t expect it to be the certain board at first since the right could’ve been registered in many forms and names. You guys were really slow back in the days too. First of all, I was not involved in the ICF setup back then. Second of all, you have absolutely no rights and obligations in the foundation. You didn’t after it was established and you don’t know. Ash_Han: Because you(ICF) never disclosed the official company registry until recently. You never invited or updated on anything at all. That’s why I…
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crainbf: It’s our duty as a Swiss foundation to comply with Swiss law. It’s definitely not our duty to comply with whatever imaginary law applies in whatever country. And, once again, we never received any request for information or otherwise from any Korean regulatory and just from you personally. It’s MY duty as a citizen of my country as I repetitively explained. It’s called “Foreign Account Tax Compliance Act(FATCA)”. I am the one has the reporting duty. Government doesn’t even know/care that ICF exist. It’s impossible for someone of your age don’t know this. I am confused if you are just playing ignorance. Reporting is personal duty to bear and that’s why you need a lawyer or accountant to help. Government do not find and calculate assets or holdings for you, and if ever they do, it means you failed to comply and government will give you a penalty. crainbf: Second of all, you have absolutely no rights and obligations in the foundation. You didn’t after it was established and you don’t know. Yes, Brian that’s the very problem here in the first place. My right hasn’t been registered and that’s the one job you had to do for me. crainbf:…
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[quote=“Ash_Han, post:62, topic:11995, full:true”]
crainbf:It’s our duty as a Swiss foundation to comply with Swiss law. It’s definitely not our duty to comply with whatever imaginary law applies in whatever country. And, once again, we never received any request for information or otherwise from any Korean regulatory and just from you personally.
This is the kind of deliberately obtuse bullshit you get from somebody who’s dog ate the homework.
Hello. A new law comes into force in 2024 (1.01.2024). I would read it. It talks about the founder and former members.
Ash_Han:What I only addressed through this entire thread was the importance of legally compliant organization and legal minded management. If you think this will make your organization or your life harder not easier, then you are the ones to blame, not me.
Hi Ash, thank you for coming out and speaking out and thank you for founding the ICF. You have been so vital to the cosmos we love so much. So many of us here owe our careers to your decision to help @ebuchman and @jaekwon and @jtremback start the foundation.
I also do not understand @crainbf’s decision-making here but I think he is trying to do well, even if in this case I must respectfully disagree with his stance.
I think Brian has just entered an extremely challenging role.
I also think that the Cosmos SDK has solutions to situations like these, namely governance:
Once again, Ash, Thank you sir.
@crainbf thank you, too.
G. 🎒🎺
We are voting No to 839. But seeing all this drama, makes you want to change the vote in all honesty…
What do you mean by “drama?”
Everything undesirable is swept into one genre called drama.
Organizational failure is not drama. It’s a crisis.
Conflict avoidance.
Minimizing issues.
Obfuscation of responsibility.
We are of the problem as much as ICF is the problem. We get the leadership we deserve.
its not drama, its communication imo. in the above sentence i was merely using it as a quote