The NEO project's treasury has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets lacking multi-signature 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 architect of its core protocol. Da estimates that Zhang alone controls around 85% of the assets with a single signature, valued between $200 million and $250 million, surpassing the project's current market capitalization of $197 million. The two co-founders have been publicly disagreeing since December, resulting in rival governance plans and an unsuccessful mediation attempt in Hong Kong.
Da has proposed a restructuring plan that involves redomiciling the Neo Foundation to the Cayman Islands, establishing an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's proposal involves staying on the board and keeping the Foundation in Singapore, along with a formal investigation into historical asset management to address potential corruption and asset mismanagement. Da has dismissed these accusations, stating there is no corruption or misuse of funds. Observers note that the project's treasury holds approximately $460 million in assets, double its market value, while the token has dropped 98% from its 2018 peak.
The situation has led to a stalemate, with each co-founder holding significant leverage over the other. Da frames his proposal as a form of mutual disarmament, where both he and Zhang would relinquish individual control over assets. However, the success of this proposal relies on Zhang's cooperation, and Da is uncertain if he will agree.