Co-Founder Holds Keys to $200 Million in Project's Crypto, Sparking Governance Debate

The treasury of the NEO project has been managed in an unconventional manner, with hundreds of millions of dollars in crypto assets controlled through personal wallets, lacking multisig 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 single signature authority. This amount exceeds the project's current market capitalization of $197 million. The native NEO and GAS tokens held by Zhang have not been transferred to a multi-sig setup. 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 involves relocating the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and barring both founders from the board for 24 months. Additionally, the plan includes redistributing approximately 26 million NEO and 40 million GAS tokens to tokenholders. In response, Zhang has proposed an alternative plan, which involves staying on the board and keeping the Foundation in Singapore. Zhang's plan also calls for a formal investigation into historical asset management, addressing potential corruption, improper asset transfers, and concealment of public assets. Da has dismissed these allegations, stating that there is no corruption or misuse of funds. The project's treasury holds approximately $460 million in assets, roughly double its market value, with the token having dropped 98% from its 2018 peak. The treasury is split into two halves, with the native NEO and GAS tokens under Zhang's control, and the non-token assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da. The result is a stalemate, with each co-founder holding leverage over the other, and neither willing to make the first move. Da has framed his proposal as a form of mutual disarmament, where both parties would sacrifice their individual control over assets. However, the success of this plan depends on Zhang's cooperation, and it remains uncertain whether he will agree to transfer the single-signature token holdings to a multisig lock address.