[1IP-77] [Fast-Track] Authorize 1inch Foundation to Represent 1inch DAO in Hardware Wallet Dispute

1IP: Authorize 1inch Foundation to Represent 1inch DAO in Hardware Wallet Dispute

Simple Summary

The proposal seeks to authorize the 1inch Foundation to formally represent the 1inch DAO in all dispute resolution proceedings—including arbitration, litigation, or out-of-court processes—relating to the termination of the 1inch DAO’s relationship with Alexei Devyatkin, HWLT FZE, and affiliated parties, as resolved in 1IP-62: Termination of Relationship with Hardware Wallet.

Abstract

This proposal authorizes the 1inch Foundation to act as the official representative of the 1inch DAO in connection with a dispute arising from the terminated relationship with Alexei Devyatkin, HWLT FZE, and affiliated parties. This includes authority to represent the 1inch DAO in any dispute resolution process, including arbitration or litigation, and to carry out all necessary steps to protect the 1inch DAO’s interests in the matter resolved under Proposal 1IP-62.

The 1inch Foundation will ensure any recovered assets are returned to the 1inch DAO and will keep the community informed of outcomes where permissible. All reasonable litigation expenses incurred will be reimbursed by the 1inch DAO, subject to proper documentation and attribution to the current dispute.

Motivation

In June 2024, the 1inch DAO approved Proposal 1IP-62, which resolved to terminate the 1inch DAO’s operational relationship with Mr. Alexei Devyatkin, HWLT FZE, and related parties involved in the Hardware Wallet project. The proposal followed serious concerns over delays, lack of deliverables, mismanagement, misaligned communication and execution of the 1IP-30: 1inch Hardware Wallet production completion.

Since that time, and after several months of stalled progress, the relevant counterparties have now agreed to initiate alternative dispute resolution proceedings. As a decentralized entity, the 1inch DAO requires a legally capable and community-aligned representative to act on its behalf in these proceedings.

This proposal seeks to grant such authority to the 1inch Foundation.

Rationale

Why the 1inch Foundation

The 1inch Foundation is the most appropriate and capable entity to undertake this representation for the following reasons:

• Legal standing: As a registered legal entity, the Foundation can participate in formal legal or arbitral proceedings on behalf of the 1inch DAO — something the 1inch DAO itself, as a decentralized community without legal personality, cannot do.
• Community mission: As per section 3.1 of the 1inch DAO Guidelines the Foundation’s mission is to “foster the 1inch Network’s growth and support initiatives that benefit the Community.”
• Mandate to act: Section 4.3.2 of the 1inch DAO Guidelines confirms that the 1inch DAO has the authority to instruct the Foundation to implement operational or technical decisions in the 1inch DAO’s interest.
• Proposal precedent: Proposal 1IP-62 itself included the following clause:
  “Subject to the successful vote of this proposal, 1inch DAO should engage an external legal counsel or request 1inch Foundation or other contributors to represent 1inch DAO in any further communications with Mr. Devyatkin (‘Representative’).”

In conclusion, the Foundation’s legal status, community-aligned mission, and the 1inch DAO’s explicit authority to instruct it together provide a clear and solid basis for authorizing it to represent the 1inch DAO. Given that the 1inch DAO cannot itself appear in formal legal or arbitration proceedings, the Foundation’s involvement is not only appropriate, it is necessary.

Specification

Scope of Representation

the 1inch DAO authorizes the 1inch Foundation, a foundation established under the laws of the Cayman Islands with its registered office at (the “Attorney-in-Fact”), to act as its representative and attorney-in-fact for all purposes related to the dispute arising from the terminated relationship with HWLT FZE (HWLT FZE, a UAE free zone establishment incorporated in Dubai, the UAE, with registered address at Smart Desk 363-17 TEC, Level 3, The Offices 3, One Central, Dubai World Trade Centre, Dubai, the UAE), Alexei Devyatkin, and affiliated parties, as addressed in Proposal 1IP-62.

This proposal shall serve as a formal Power of Attorney from the 1inch DAO (the “Principal”), a decentralized organization formed by holders of the 1INCH cryptographic token, granting the Foundation the full power and authority to:

• initiate, join, or respond to any formal legal, arbitral, or administrative proceedings in any jurisdiction;
• retain and instruct external service providers, including legal counsel, forensic experts, auditors, translators, and other relevant professionals;
• manage all correspondence and communication with counterparties, legal teams, arbitration panels, courts, or other tribunals;
• engage with regulators, government agencies, or supervisory authorities where relevant or required;
• negotiate settlements or enter into alternative dispute resolution frameworks, subject to DAO-aligned objectives;
• and take all reasonable and necessary actions to protect the legal, reputational, and financial interests of the 1inch DAO in connection with the matter.

In all of the above, the 1inch Foundation shall act solely in execution of this resolution and any further instructions of the 1inch DAO adopted in accordance with its governance rules (through https://snapshot.org/#/1inch.eth) and shall safeguard the best interests of the Principal at all times.

To the extent that any jurisdiction or forum does not recognize the legal capacity of a decentralized organization to issue a formal power of attorney, this resolution shall serve as an equivalent governance mandate or authorization instrument, issued in accordance with the 1inch DAO’s internal governance framework, and shall be deemed a valid and binding instruction from the 1inch DAO Community to the 1inch Foundation to act on its behalf in all actions described above.

Reporting, Recovered funds, and Limitations

The 1inch Foundation commits that:

• Any amounts recovered by the 1inch Foundation as a result of the dispute resolution in connection with the dispute arising from the relationship terminated under Proposal 1IP-62 will, to the extent they correspond to funds originally granted or committed by the 1inch DAO to HWLT FZE, Mr. Devyatkin, or affiliated parties, be returned to the 1inch DAO.
• The 1inch DAO acknowledges that there is no guarantee of recovery, whether in whole or in part, and that resolution proceedings may result in no returned assets.
• Where legally permitted, the 1inch Foundation will inform the 1inch DAO of the outcome and the amounts returned, recognizing that certain information may be subject to confidentiality obligations or restrictions arising from the dispute resolution process.

Expense Reimbursement

• The 1inch DAO will reimburse all reasonable costs and expenses related to legal representation, arbitration, and other dispute-related services incurred by the Foundation or any third-parties reasonably engaged by it.
• Reimbursement is limited to expenses specifically attributable to the dispute covered by Proposal 1IP-62.
• As Fast-Track Proposals do not carry spending authority under section 5.6.3 of the 1inch DAO Guidelines, a separate Proposal will be submitted for DAO approval once the relevant expenses are known. Such a proposal will include a full breakdown of costs, supporting documentation, and confirmation of services rendered, ensuring transparency and proper community oversight.

Final Words

This proposal is submitted under the Fast-Track Proposal process, as provided in section 5.6.3 of the 1inch DAO Guidelines, which allows for a streamlined governance process in cases of emergency or urgent circumstances.

The need for prompt action arises from time-sensitive negotiations initiated by the counterparties involved in the dispute. Delays in authorization may jeopardize the ability of the DAO to respond effectively, preserve legal standing, or protect its interests. Taking advantage of current momentum is critical to securing a favorable resolution and enforcing the community’s rights.