A Co-Founder Holds the Keys to $200 Million in Crypto, Sparking a Governance Dispute

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 alone controls around 85% of the assets, worth between $200 million and $250 million, with no multisig protections in place. The native NEO and GAS tokens held by Zhang are currently valued at more than NEO's market capitalization of $197 million. The two co-founders have been publicly disputing since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan that involves redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS to tokenholders. In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's plan 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. The situation has sparked concerns among observers, with some noting 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 controlled by Zhang, and the non-token assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da. 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 plan depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisig lock address.