A $200 Million Crypto Project's Fate Hangs in the Balance as Co-Founders Clash

For years, the NEO treasury has been held in a unique setup, with hundreds of millions of dollars in crypto assets controlled through personal wallets and lacking multisig protections and formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the other co-founder and architect of NEO's core protocol. Da estimates that Zhang alone controls around 85% of the assets with a single signature, valued between $200 million and $250 million. The native NEO and GAS tokens held by Zhang are worth more than the project's current market capitalization of $197 million. The two founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan that involves redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing roughly 26 million NEO and 40 million GAS to tokenholders. Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's proposal also calls for a formal investigation into historical asset management, including provisions to address potential corruption and improper asset transfers. Da has dismissed these accusations, stating that there is no corruption or misuse of funds. The project's treasury holds around $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. The treasury is split almost evenly between two people who are no longer speaking productively, each holding leverage over the other. Da has framed his proposal as mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this proposal depends entirely on Zhang's cooperation, and it remains to be seen whether he will agree to transfer the single-signature token holdings to a multisig lock address.