A $200 Million Crypto Conundrum: Co-Founder's Grip on Project's Assets Sparks Debate

For years, the NEO treasury has been held in an unconventional setup, with hundreds of millions of dollars in crypto assets controlled through personal wallets, lacking multisig protections and formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the other co-founder and architect of NEO's core protocol. Da estimates that Zhang holds around 85% of the assets, valued between $200 million and $250 million, with single signature control. The native NEO and GAS tokens are currently worth more than the project's $197 million market capitalization. Zhang, on the other hand, has accused Da of separate issues, and the two founders have been publicly airing their disputes since December. The disagreement has led to rival governance plans and an unsuccessful mediation effort in Hong Kong. Da's proposal, published on GitHub, calls for the Neo Foundation to be redomiciled 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 plan also includes a formal investigation into historical asset management, addressing potential corruption, improper asset transfers, and concealment of public assets. Da has dismissed these provisions, stating that there is no corruption or misuse of funds. Observers have noted that NEO's treasury holds approximately $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 between two halves, with the native NEO and GAS tokens under Zhang's single-signature control, and the non-token assets, including bitcoin, ether, stablecoins, and fund-of-fund investments, managed by NGD, the entity run by Da. Da has framed his proposal as mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this proposal depends entirely on Zhang's cooperation, and Da is unsure if Zhang is willing to cooperate.