A Single Individual Controls $200 Million in Crypto Assets, Sparking Governance Debate

For several years, the NEO project's treasury was managed through an unconventional setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets lacking multi-signature protections and formal oversight. According to co-founder Da Hongfei, the individual responsible for controlling these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da stated that 'approximately 85% of the assets are controlled by Eric alone with a single signature, and they have never been transferred to any individual or multi-signature wallet.' The native NEO and GAS tokens held by Zhang are currently valued between $200 million and $250 million, exceeding the project's current market capitalization of $197 million. Zhang has retaliated by accusing Da of separate issues, and the two founders have been publicly disputing since December. The conflict has led to rival governance proposals and an unsuccessful mediation attempt in Hong Kong. Da has published a restructuring proposal on GitHub, which involves relocating the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and barring both founders from the board for 24 months. Additionally, the proposal suggests redistributing approximately 26 million NEO and 40 million GAS tokens to token holders. In response, Zhang has proposed an alternative plan that involves staying on the board and maintaining the Foundation's presence 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.' However, some observers have raised concerns about the project's financial management, given that the treasury holds approximately $460 million in assets, roughly double the project's market value, while the token has declined by 98% from its 2018 peak. The treasury is split into two halves, with the native NEO and GAS tokens largely under Zhang's single-signature control, and the second half, comprising bitcoin, ether, stablecoins, and other investments, managed by NGD, the entity run by Da. The non-token assets have grown to over $200 million, primarily due to the appreciation of BTC and ETH holdings accumulated through early-stage investment returns. As a result, the treasury is divided almost evenly between two individuals who are no longer communicating effectively, each holding leverage over the other and unwilling to make the first move. Da has framed his proposal as a form of mutual disarmament, stating that 'NGD will lose control over most assets, including BTC and stablecoins, while Eric will lose his personal control over the majority of NEO tokens.' He emphasized that both he and Zhang need to sacrifice their individual control over assets, which he believes is the fundamental change required. Da has committed to a one-to-three month timeline for the restructuring process, which depends on Zhang's cooperation. If Zhang refuses to cooperate, Da has suggested that the community should determine the next course of action.