For years, the treasury of NEO, a cryptocurrency project, 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, the individual in control of these assets is Erik Zhang, the project's other co-founder and core protocol architect. Da estimates that Zhang alone controls around 85% of the assets, worth between $200 million and $250 million, using a single signature, without any multisig protection. The native NEO and GAS tokens held by Zhang are valued at more than the project's current market capitalization of $197 million.
The two co-founders have been publicly airing their disputes since December, resulting in rival governance plans and an unsuccessful mediation effort. Da has proposed a restructuring plan, which includes redomiciling the Neo Foundation to the Cayman Islands, establishing 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 also calls for an investigation into historical asset management, including potential corruption and improper asset transfers. Da dismisses these allegations, stating that there is no corruption or misuse of funds. The project's treasury holds approximately $460 million in assets, double its market value, with the token having dropped 98% from its 2018 peak.
The treasury is split between two halves, with the native tokens controlled by Zhang and the non-token assets managed by NGD, an entity run by Da. Da frames his proposal as a form of mutual disarmament, where both he and Zhang would sacrifice individual control over assets. However, the success of this plan depends on Zhang's cooperation, and Da is uncertain if Zhang is willing to cooperate.
If Zhang refuses, Da suggests that the community should decide the next course of action.