The NEO project's treasury, valued at hundreds of millions of dollars, has been managed through personal wallets with limited oversight and no multi-signature protections. According to co-founder Da Hongfei, approximately 85% of the assets are controlled by Erik Zhang, the project's other co-founder, with a single signature. The native NEO and GAS tokens held by Zhang are estimated to be worth between $200 million and $250 million.
This amount surpasses 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 Hongfei's proposal, published on GitHub, suggests redomiciling the Neo Foundation to the Cayman Islands, establishing an independent five-member board, and barring both founders from the board for 24 months. It also includes a plan to redistribute approximately 26 million NEO and 40 million GAS tokens to tokenholders.
In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's plan also calls for a formal investigation into historical asset management, including potential corruption and improper asset transfers. Da Hongfei dismissed these accusations, stating that there is no corruption or misuse of funds.
The project's treasury holds around $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 single-signature control and the remaining assets, including bitcoin, ether, and stablecoins, managed by NGD, the entity run by Da Hongfei. Da Hongfei framed his proposal as a form of mutual disarmament, where both he and Zhang would sacrifice their individual control over assets. However, the success of this proposal depends on Zhang's cooperation, and Da Hongfei expressed uncertainty about whether Zhang is willing to cooperate.