For several years, the NEO treasury has been managed through a unique setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multi-signature protections or formal oversight. According to co-founder Da Hongfei, the individual controlling around 85% of the assets, valued at approximately $200-250 million, is Erik Zhang, the project's other co-founder and core protocol architect.
Da stated, 'It had never been transferred to any individual or any multi-sig.' The native NEO and GAS tokens held by Zhang are currently worth more than NEO's $197 million market capitalization. Zhang has accused Da of separate issues, and the two founders have been publicly disputing since December.
The dispute has led to rival governance plans and an unsuccessful mediation effort in Hong Kong. Da proposed a restructuring plan on GitHub, which involves relocating 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 suggests maintaining the current board composition and location, with a focus on investigating historical asset management and addressing potential corruption. Da dismissed these accusations, 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 concerning, with NEO's treasury holding approximately $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. Da's proposal is framed as a 'mutual disarmament,' where both he and Zhang would relinquish control over the assets, with NGD losing control over most assets, including BTC and stablecoins, and Zhang losing personal control over the majority of NEO tokens.
Da expressed willingness to make this change but is uncertain if Zhang will cooperate. The restructuring plan's success relies on Zhang's cooperation to transfer single-signature token holdings to a multi-signature lock address, with a one-to-three month timeline. If Zhang refuses, Da believes the community should decide the course of action.