For years, the NEO treasury, worth hundreds of millions of dollars in crypto assets, has been controlled through personal wallets with no multi-signature protections and little formal oversight. According to co-founder Da Hongfei, Erik Zhang, the other co-founder and architect of NEO's core protocol, holds around 85% of the treasury, valued between $200 million and $250 million, with single signature control. Da estimates that the native NEO and GAS tokens Zhang holds are currently worth more than NEO's $197 million market capitalization. The two founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da has proposed a restructuring plan, which includes redomiciling the Neo Foundation 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, keeping the Foundation in Singapore, and calling for a formal investigation into historical asset management. Da has dismissed Zhang's accusations of corruption and misuse of funds, stating that there is no evidence to support these claims.
The project's treasury holds around $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak. 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 plan depends entirely on Zhang's cooperation, and it remains to be seen whether he will agree to transfer the single-signature token holdings to a multi-signature lock address.