A Single Individual Controls $200 Million in Crypto for a Project, Sparking Governance Debate

For years, the NEO project's treasury, valued at hundreds of millions of dollars in cryptocurrency, has been managed through an unconventional setup: personal wallets with no multi-signature protections and minimal formal oversight. According to co-founder Da Hongfei, the individual in control of this vast sum is Erik Zhang, the project's other co-founder and the architect of its core protocol. Da estimates that Zhang alone controls around 85% of the funds, valued between $200 million and $250 million, with no multi-signature protection in place. This amount exceeds the project's current market capitalization of $197 million. The native NEO and GAS tokens held by Zhang are at the center of the dispute. The two co-founders have been publicly airing their disagreements since December, resulting in competing governance proposals and an unsuccessful mediation attempt in Hong Kong. Da has proposed a restructuring plan, which includes relocating the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and preventing both founders from serving on the board for 24 months. Additionally, his plan involves redistributing approximately 26 million NEO and 40 million GAS tokens to token holders. In contrast, Zhang's counter-proposal suggests maintaining the current governance structure, with him remaining on the board, and calls for an investigation into historical asset management to address potential corruption and improper asset transfers. Da has dismissed these accusations, stating that there is no evidence of corruption or misuse of funds. The project's treasury holds around $460 million in assets, roughly double its market value, while the token has experienced a significant decline of 98% from its peak in 2018. The situation has resulted in a stalemate, with each co-founder holding leverage over the other. Da views his proposal as a means of mutual disarmament, where both he and Zhang would relinquish individual control over the assets. However, the success of this plan relies heavily on Zhang's cooperation, particularly in transferring the single-signature token holdings to a multi-signature lock address. If Zhang refuses, the community may need to intervene to resolve the impasse.