For years, the NEO treasury 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, Erik Zhang, the project's other co-founder and core protocol architect, holds around 85% of the treasury, valued between $200 million and $250 million, with single-signature control.
Da estimated that the native NEO and GAS tokens held by Zhang are currently worth more than NEO's $197 million market capitalization. The two founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da's proposal, published on GitHub, calls for redomiciling the Neo Foundation to the Cayman Islands, replacing the current governance with an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's plan also includes a formal investigation into historical asset management, addressing potential corruption and improper asset transfers. Da dismissed these accusations, 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 between 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. Da framed his proposal as a mutual disarmament, where both he and Zhang would sacrifice individual control over assets. However, the success of this proposal depends on Zhang's cooperation, and Da is unsure if Zhang is willing to cooperate.
If Zhang refuses, Da believes the community should decide the next steps.