The treasury of the NEO project has been managed in an unconventional manner, with hundreds of millions of dollars in cryptocurrency assets controlled by personal wallets lacking multi-signature protections and formal oversight. According to Da Hongfei, co-founder of NEO, the individual in control of these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da stated that around 85% of the assets are controlled by Zhang alone, using a single signature, and have never been transferred to a multi-signature wallet or any individual.
The native NEO and GAS tokens held by Zhang are currently valued between $200 million and $250 million, exceeding the project's current market capitalization of $197 million. The two co-founders have been publicly disputing since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong. Da has proposed a restructuring plan, which includes relocating the Neo Foundation from Singapore to the Cayman Islands, establishing an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS tokens to tokenholders.
In contrast, Zhang's counter-proposal involves remaining 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 accusations, stating that there is no corruption or misuse of funds. Observers have noted that the project's treasury holds approximately $460 million in assets, roughly double its market value, while the token has dropped 98% from its 2018 peak.
The situation has resulted in a stalemate, with each co-founder holding leverage over the other. Da has framed his proposal as a form of mutual disarmament, where both he and Zhang would relinquish their individual control over the assets.
The success of Da's restructuring plan depends on Zhang's cooperation, particularly in transferring the single-signature token holdings to a multi-signature lock address.