A group of Azuki enthusiasts, who have formed a decentralized autonomous organization (DAO) known as AzukiDAO, have proposed a plan to recover 20,000 Ether (ETH) from Azuki's founder, Zagabond, whose real name is Alex Xu. This proposal comes in the wake of the contentious launch of the "Elementals" NFT collection by Azuki. The DAO members are seeking to hire a lawyer to take legal action against Zagabond for allegedly "rugging" multiple projects. The aim is to retrieve $39 million worth of ETH that was earned from the launch of the "Elementals" NFT collection. The proposal suggests that any recovered funds should be reinvested into the DAO to foster the growth of the entire Azuki community.

As of the time of reporting, 88.11% of AzukiDAO (BEAN) tokens have been used to vote in favor of the action, while 11.9% have voted against it. The proposal is set to conclude at 6:38 am UTC on July 3.

However, the legitimacy of AzukiDAO has been questioned. Some Azuki holders and a Twitter commentator known as Tytan. ETH have expressed doubts about the origins of the DAO and its relationship with members of the Azuki project. Data from Etherscan shows that the contract for the BEAN token used to vote on the proposal was minted just two days prior, and the associated Twitter page was created only in June 2023. The Discord channel of AzukiDAO has only 116 members.

The controversy surrounding Azuki stems from the launch of its "Elementals" NFT collection on June 27. The launch was met with criticism due to issues such as a small presale window, website overload leading to mint failures, and perceived lack of originality in the new NFTs art. Concerns were also raised about the potential dilution of the value of preexisting NFTs in the collection due to the release of 20,000 new NFTs. The controversy escalated when the project team reportedly transferred 20,000 ETH from the wallet shortly after the collection was minted.