A Single Individual Controls $200 Million in Crypto for a Project, Sparking Calls for Change

For an extended period, the treasury of NEO was managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency controlled through personal wallets, lacking multi-signature security 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 stated in an interview, 'Around 85% is controlled by Eric alone with a single signature. It had never been transferred to any individual or multi-sig.' The NEO and GAS tokens held by Zhang are currently valued between $200 million and $250 million, exceeding NEO's market capitalization of $197 million. Zhang has countered with accusations against Da, and the two founders have been publicly airing their disputes since December. This conflict has led to rival governance proposals and an unsuccessful mediation effort in Hong Kong. Da published his restructuring plan on GitHub on April 9, proposing the relocation of 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, he suggested redistributing approximately 26 million NEO and 40 million GAS tokens to tokenholders. In response, Zhang's counter-proposal involves remaining on the board and keeping the Foundation in Singapore. Zhang's plan also calls for a formal investigation into historical asset management, addressing potential corruption, improper asset transfers, and concealment of public assets. Da dismissed these provisions, stating, 'I think it's a very blunt and empty accusation. There is no corruption, no misuse of funds.' However, some observers find the numbers striking, with NEO's treasury holding approximately $460 million in assets, double the project's market value, while the token has dropped 98% from its 2018 peak. The treasury is divided into two halves, with the native NEO and GAS tokens largely under Zhang's single-signature control, and the second portion, comprising bitcoin, ether, stablecoins, and fund-of-fund investments, managed by NGD, the entity run by Da. These non-token assets have grown to over $200 million, primarily due to the appreciation of BTC and ETH holdings. The result is a treasury split almost evenly between two individuals who are no longer communicating productively, each holding leverage over the other and unwilling to make the first move. Da framed his proposal as a form of mutual disarmament, where NGD would relinquish control over most assets, including BTC and stablecoins, and Zhang would lose personal control over the majority of NEO tokens. Da expressed willingness to make this change but is uncertain if Zhang will cooperate. The success of Da's restructuring plan depends entirely on Zhang's cooperation, particularly in transferring single-signature token holdings to a multi-signature lock address. Da committed to a one-to-three month timeline for this process. When asked about the consequences of Zhang's refusal, Da stated, 'If there's one person holding around half of a crypto native token and not willing to hand over to a multi-sig, constitutional governance, then what the community should do, I think the answer should come from the community itself.'