The cryptocurrency project's treasury, valued at hundreds of millions of dollars, has been managed through personal wallets without multi-signature protections or formal oversight. According to co-founder Da Hongfei, the majority of these assets, approximately $200-250 million in NEO and GAS tokens, are controlled by co-founder Erik Zhang.
Da estimates that around 85% of the assets are held by Zhang with a single signature, and have never been transferred to a multi-signature wallet or any individual. This unusual setup has sparked concerns about governance and accountability. The two co-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, establishing an independent five-member board, and redistributing tokens to holders. Zhang's counter-proposal involves staying on the board, keeping the foundation in Singapore, and conducting a formal investigation into historical asset management. Da has dismissed these provisions, stating that there is no corruption or misuse of funds.
The project's treasury holds approximately $460 million in assets, double its market value, with the token having dropped 98% from its 2018 peak. The treasury is split between two halves, with the native tokens controlled by Zhang and the non-token assets managed by NGD, the entity run by Da.
Da has framed his proposal as a form of 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 it remains uncertain whether he will agree to transfer the single-signature token holdings to a multi-signature lock address.