The Ethereum Foundation has ignited community speculation after transferring $654 million worth of ETH to a wallet historically associated with asset sales. The transaction, flagged by blockchain analytics firm Arkham Intelligence, has raised questions about the organization’s treasury management and whether the funds are intended to address long-standing issues with developer compensation.

Scrutiny Over Developer Compensation

One prominent theory is that the funds could be used to correct the underpayment of core contributors. The issue gained significant attention when developer Péter Szilágyi departed the Foundation in September, citing inadequate pay. Reports revealed Szilágyi had earned $625,000 before taxes over a six-year period, a figure many in the community consider well below the market rate for his contributions to the Ethereum ecosystem. While a co-executive director at the Foundation has since admitted that veteran developers have been underpaid, there has been no official confirmation linking the $654 million transfer to this issue.

A Shift in Treasury Strategy?

This latest transaction appears to deviate from the Foundation’s own treasury guidelines, which were published in June 2025. The policy outlined a strategy of regular, gradual ETH sales to fund research, grants, and ecosystem development. In line with that plan, the Foundation had previously sold approximately $25 million in ETH to SharpLink Gaming and another $12.7 million through smaller sales. However, the recent $654 million transfer was executed in a single transaction, a stark contrast to the gradual approach and nearly 16 times larger than its last major sale.

The Foundation also drew criticism from decentralized finance (DeFi) advocates for routing the funds toward centralized exchanges like Kraken. Critics argue that using on-chain or over-the-counter (OTC) sales would have provided greater transparency for the community.

Market Reaction and Broader Tensions

Despite the size of the transfer, the market has remained relatively stable, with ETH trading at $4,326 on October 21, 2025, up 23% over the previous month. Nonetheless, traders are monitoring the situation closely, as large sales from the Foundation could introduce price volatility. The move comes amid a period of internal friction, with several key developers and researchers recently leaving the organization. Sandeep Nailwal, CEO of Polygon, has openly criticized the Foundation for allegedly overlooking the contributions of Layer-2 (L2) projects to Ethereum’s growth, though co-founder Vitalik Buterin has defended its commitment to research and development.

This isn’t the first time the Foundation’s treasury management has been questioned. It faced backlash for selling 2,795 ETH for $13 million during a price surge in August 2025 and again in January 2025 for a smaller sale, with some arguing the timing suggested market-peak sales that could weaken trust in ETH as a reserve asset.

The Ethereum Foundation maintains that these sales are necessary to fund its operations and grant programs, which distributed over $32 million in the first quarter of 2025 to support projects like Aave and Morpho. For now, the purpose of the $654 million transfer remains undisclosed, highlighting the ongoing challenge the Foundation faces in balancing its operational needs with community expectations for transparency and market stability.