Co-Founder Holds Keys to $200 Million in Crypto, Sparking Governance Dispute

For several years, the NEO treasury was managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency assets controlled through personal wallets without multi-sig protection or formal oversight. According to co-founder Da Hongfei, Erik Zhang, the other co-founder and architect of NEO's core protocol, has control over approximately 85% of the assets with a single signature. The native NEO and GAS tokens held by Zhang are valued between $200 million and $250 million, exceeding NEO's current market capitalization of $197 million. The two co-founders have been publicly disputing since December, resulting in rival governance proposals and an unsuccessful mediation attempt in Hong Kong. Da has proposed a restructuring plan, which involves relocating the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and barring both founders from the board for 24 months. In contrast, Zhang's counter-proposal suggests maintaining the current governance structure and conducting a formal investigation into historical asset management. Da has dismissed these accusations, stating that there is no corruption or misuse of funds. Observers have noted that NEO's treasury holds approximately $460 million in assets, double the project's market value, while the token has dropped 98% from its 2018 peak. The treasury is divided into two halves, with the native NEO and GAS tokens under Zhang's control and the non-token assets managed by NGD, the entity run by Da. The result is a split treasury, with each co-founder holding leverage over the other, and neither willing to make the first move. Da has framed his proposal as a mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this proposal depends on Zhang's cooperation, and Da has stated that if Zhang refuses, the community should decide the next course of action.