For years, the NEO project's treasury was managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency assets controlled through personal wallets, lacking multisignature protections and formal oversight. According to co-founder Da Hongfei, the individual in control of these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang alone controls around 85% of the assets, valued between $200 million and $250 million, with no multisignature protections in place.
The native NEO and GAS tokens held by Zhang are currently worth more than the project's $197 million market capitalization. The two co-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 to the Cayman Islands, establishing an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS tokens to token holders.
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 project'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, 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 proposal depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisignature lock address.