For several years, the treasury of a prominent crypto project has been managed through an unconventional setup, with hundreds of millions of dollars in digital assets controlled by personal wallets, lacking multisig protection and formal oversight. According to co-founder Da Hongfei, his fellow co-founder Erik Zhang has sole control over approximately 85% of the project's assets, valued between $200 million and $250 million, using a single signature.
This arrangement has never been transferred to a multi-sig setup or to any individual. The native tokens held by Zhang are currently worth more than the project's market capitalization of $197 million.
The two co-founders have been engaged in a public dispute since December, resulting in rival governance proposals and an unsuccessful mediation effort. Da's proposal, published on GitHub, suggests relocating the project's foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and preventing both founders from participating in the board for 24 months. Additionally, it recommends redistributing a significant amount of tokens to holders.
In response, Zhang has proposed an alternative plan, which includes staying on the board and keeping the foundation in Singapore. His proposal also calls for a formal investigation into historical asset management, addressing potential corruption and improper asset transfers. Da has dismissed these accusations, stating that there is no evidence of corruption or misuse of funds.
However, some observers have raised concerns about the project's treasury, which holds approximately $460 million in assets, roughly double the project's market value, while the token has experienced a significant decline of 98% from its 2018 peak. The project's financial report for FY2025 revealed a substantial portfolio, including over 1,100 BTC, more than $100 million in stablecoins and cash, and venture investments, such as an unliquidated stake in Binance. Da has divided the treasury into two halves, with the native tokens primarily under Zhang's control and the non-token assets, including bitcoin, ether, and stablecoins, managed by the entity Da runs. The result is a split treasury, with each co-founder holding significant leverage over the other, and neither willing to compromise.
Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish their individual control over the assets. He expressed willingness to make this change but is uncertain if Zhang will cooperate. The success of Da's restructuring plan relies heavily on Zhang's cooperation, particularly in transferring the single-signature token holdings to a multisig lock address. If Zhang refuses, Da believes the community should decide the course of action.