A Single Individual Controls $200 Million in Crypto for a Project, Sparking Debate Over Governance

The treasury of a cryptocurrency project has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets without multi-signature protections or 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 project's assets, worth between $200 million and $250 million, using a single signature. The native tokens held by Zhang are valued at more than the project's current market capitalization of $197 million. The two co-founders have been publicly disputing their differences since December, resulting in rival governance plans and an unsuccessful mediation effort. Da has proposed a restructuring plan that involves redomiciling the project's foundation to the Cayman Islands, establishing an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's counter-proposal suggests maintaining the current governance structure and conducting 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 approximately $460 million in assets, which is roughly double its market value, while the token has dropped 98% from its peak in 2018. The treasury is split between two halves, with the native tokens controlled by Zhang and the non-token assets managed by Da's entity, NGD. Da has framed his proposal as a form of mutual disarmament, where both parties would relinquish control over the assets. However, the success of this proposal depends on Zhang's cooperation, and Da is uncertain if Zhang is willing to compromise. If Zhang refuses, Da believes the community should decide the next course of action.