Co-Founder Holds Keys to $200 Million in Project's Crypto, Sparking Governance Debate

For years, the NEO project's treasury was controlled through personal wallets with no multi-sig protections, a setup that would be unusual for most financial institutions. According to co-founder Da Hongfei, the person in control of these assets is Erik Zhang, the other co-founder and architect of the project's core protocol. Da estimates that Zhang holds around 85% of the project's assets, worth between $200 million and $250 million, with no multisig protections and little formal oversight. The native NEO and GAS tokens held by Zhang are currently worth more than the project's $197 million market capitalization. The two founders have been airing their disputes in public since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan that includes 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, improper asset transfers, and concealment of public assets. Da has dismissed these provisions as baseless accusations. 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 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 to be seen whether he will agree to transfer the single-signature token holdings to a multisig lock address.