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 without multi-signature protections or 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. Hongfei stated that approximately 85% of the assets are controlled by Zhang alone, with a single signature, and have never been transferred to a multi-signature arrangement 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. Zhang has retaliated by accusing Hongfei of separate issues, and the two founders have been publicly disputing these claims since December.
The conflict has led to rival governance plans and an unsuccessful mediation attempt in Hong Kong. Hongfei published a restructuring proposal on GitHub, which involves redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, and redistributing approximately 26 million NEO and 40 million GAS tokens to token holders. Zhang's counter-proposal involves maintaining his position on the board and keeping the Foundation in Singapore.
Zhang's proposal also calls for a formal investigation into historical asset management, including provisions to address potential corruption and improper asset transfers. Hongfei dismissed these allegations, stating that there is no corruption or misuse of funds. However, some observers find the numbers concerning, with NEO's treasury holding approximately $460 million in assets, roughly double the project's market value, while the token has dropped 98% from its 2018 peak.
The treasury is split between two halves, with the native NEO and GAS tokens largely under Zhang's single-signature control, and the second half, comprising bitcoin, ether, stablecoins, and other investments, managed by NGD, the entity run by Hongfei. Da framed his proposal as a form of mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. He expressed willingness to cooperate but is unsure if Zhang will do the same.
The success of the restructuring plan depends on Zhang's cooperation, particularly in transferring the single-signature token holdings to a multi-signature lock address. If Zhang refuses, Hongfei believes the community should decide the next course of action.