The cryptocurrency project NEO has been operating with a unique and potentially risky financial setup, where hundreds of millions of dollars in crypto assets have been controlled by a single individual, co-founder Erik Zhang, without multi-signature protections or formal oversight. According to Da Hongfei, the other co-founder, Zhang holds around 85% of the project's assets, valued between $200 million and $250 million, with single-signature control.
The two founders have been embroiled in a public dispute since December, with each proposing rival governance plans. Da's plan, published on GitHub, calls for the Neo Foundation to be redomiciled in the Cayman Islands, an independent five-member board, and the redistribution of tokens to holders. In contrast, Zhang's proposal involves staying on the board, keeping the Foundation in Singapore, and conducting a formal investigation into historical asset management. Da has dismissed Zhang's accusations of corruption and misuse of funds as baseless.
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 situation has resulted in a stalemate, with each founder holding leverage over the other, and neither willing to concede.
Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish control over the assets. However, the success of this plan relies on Zhang's cooperation, which remains uncertain.