A Crypto Project's $200 Million Conundrum: One Person Holds the Keys

The treasury of a prominent crypto project, NEO, has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled by personal wallets and lacking multisignature protections. According to co-founder Da Hongfei, the individual responsible for this setup 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, with no multisignature protections in place. The two co-founders have been publicly disputing the project's governance and management, resulting in rival restructuring plans. Da's proposal, published on GitHub, calls for the Neo Foundation to be redomiciled in the Cayman Islands, the establishment of an independent five-member board, and the redistribution of approximately 26 million NEO and 40 million GAS tokens to tokenholders. In contrast, Zhang's counter-proposal involves remaining on the board, keeping the Foundation in Singapore, and conducting a formal investigation into historical asset management. Da has dismissed Zhang's accusations of corruption and misuse of funds as baseless. The project's treasury holds around $460 million in assets, roughly double its market value, while the token has plummeted 98% from its 2018 peak. The situation has resulted in a stalemate, with both co-founders holding significant leverage over the project's assets and neither willing to relinquish control. Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would sacrifice their individual control over the assets. However, the success of this plan relies on Zhang's cooperation, which remains uncertain.